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U.S. grains: Wheat hits three-month high on signs of tightening supplies

Snows in Minnesota, North Dakota lift soybeans

Chicago | Reuters — Chicago wheat futures touched a three-month high on Friday, buoyed by rising cash prices and signs of tightening global supplies, analysts said.

Soybean futures rose on worries about the size of the U.S. harvest while corn fell on disappointing weekly U.S. export sales.

At the Chicago Board of Trade, December soft red winter wheat futures ended up 6-3/4 cents at $5.32-1/4 per bushel after reaching $5.32-3/4, its highest since July 15 (all figures US$). For the week, the contract rose 24-1/4 cents a bushel or 4.8 per cent, its seventh straight weekly advance.

Wheat futures have drawn support as worsening crop prospects in Southern Hemisphere exporters Argentina and Australia, as well as weather-hampered spring wheat harvests in North America, have shifted attention away from large global stocks.

Australia’s wheat production this year is expected to drop to 15.5 million tonnes, National Australia Bank said as it cut its forecast to well below recent market estimates of around 19 million tonnes.

In Argentina, recent rains have not been strong enough to help wheat fields after weeks of dryness, the Buenos Aires Grains Exchange said on Thursday.

At the same time, Saudi Arabia tendered to buy wheat this week, and Egypt bought 405,000 tonnes of Russian, French and Ukrainian wheat at an international tender at prices that were higher than what it paid a week earlier.

“The Egyptian tender this week was nearly $9 to $10 (per tonne) above the previous week. Russian (cash wheat) values are up; they keep talking a big crop, but it seems like their internal prices are going up,” said Matt Connelly, analyst with the Hightower Report in Chicago.

CBOT November soybeans ended up 2-1/2 cents at $9.34 a bushel while December corn settled down 3-3/4 cents at $3.91 a bushel.

Soybeans drew support from strong weekly export sales data along with worries about U.S. yields, particularly in light of recent snowfall in Minnesota and North Dakota. The U.S. Department of Agriculture (USDA) is scheduled to release updated crop monthly crop estimates on Nov. 8.

In its weekly export sales report, USDA put export sales of U.S. soybeans in the week to Oct. 10 at just over 1.6 million tonnes, at the top end of trade expectations.

For corn, USDA’s export sales tally was 368,500 tonnes, below the lowest in a range of trade expectations.

“We keep falling further behind our sales pace in corn,” Connelly said.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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