U.S. grains: Wheat hits six-month top on worries over Russian exports

(Lisa Guenther photo)

Chicago | Reuters –– Chicago Board of Trade wheat futures climbed to a six-month high Tuesday on lingering fears that Russia might seek to curb grain exports as a result of pressure on the rouble.

Soybeans fell on improving South American crop prospects and softening values for soymeal while corn retreated from multimonth highs set a day earlier.

At the CBOT, March wheat settled up 4-1/4 cents at $6.23-1/4 after touching $6.39, the highest spot price since May 29 (all figures US$). The market pared earlier gains as traders took profits.

January soybeans ended down 16 cents at $10.23-1/2 a bushel and March corn fell 2-1/2 cents to end at $4.06 a bushel.

Russia’s economic woes remained the focus among wheat traders. Agriculture Minister Nikolai Fyodorov said that Russia, one of the world’s key wheat exporters, would only use its grain restocking program to regulate exports, which are running at a record pace due to a slump in the rouble.

But analysts speculated that runaway inflation might force the government to take stronger action to protect domestic bread prices.

“I think the minister is quite honest when he says this, but life can force him to change his mind,” said Andrey Sizov, the head of SovEcon agriculture consultancy.

In a possible sign of export restrictions, Russia’s Veterinary and Phytosanitary Surveillance Service restricted grain export certificates for some countries, trade sources said.

CBOT soybeans fell, led by soymeal amid softening South American cash meal values, traders said. Additional pressure stemmed from favorable weather in South America that is bolstering prospects for developing soy crops.

“We are not losing any of the bean crop in Brazil,” said Mike Zuzolo, president of Global Commodity Analytics.

Traders shrugged at news that Chinese buyers signed contracts to purchase more than one million tonnes of U.S. soybeans at a ceremony in Chicago, a relatively modest amount for the world’s top soy customer.

CBOT corn set back from a five-month high set Monday as traders booked profits and farmers took advantage of the rally, selling portions of their record-large 2014 harvest.

“Producer selling is really limiting the ability of corn and soy to rally,” said Austin Damiani, a broker with Frontier Futures in Minneapolis.

— Julie Ingwersen is a Reuters correspondent covering ag commodity markets from Chicago. Additional reporting for Reuters by Naveen Thukral and Nigel Hunt.

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