U.S. grains: Wheat nears five-month top as Russia tightens export rules

(Lisa Guenther photo)

Chicago | Reuters — U.S. wheat futures climbed to their highest in nearly five months on Friday, supported by news that Russia, a major global wheat supplier, was tightening its grain export rules, traders said.

Soybeans fell nearly three per cent as soymeal declined on talk of softening cash meal values. Corn also sagged on a day when U.S. crude oil tumbled 10 per cent after OPEC’s decision a day earlier not to cut output.

At the Chicago Board of Trade, most-active March wheat settled up 15-3/4 cents at $5.78-1/2 per bushel in a shortened session following the U.S. Thanksgiving holiday (all figures US$). The spot December contract ended at $5.77-1/4 after reaching $5.79-1/4, the highest spot price since June 30.

Wheat opened lower but quickly rallied on worries of a slowdown in offerings from Russia, which the U.S. Department of Agriculture projects as the world’s No. 3 wheat exporter for 2014-15 after the EU and the U.S.

Russia’s Veterinary and Phytosanitary Surveillance Service (VPSS) said it was toughening rules for grain exports, a move that the agency said could lead to a drop in exports.

A deputy agriculture minister said on Thursday there was no need to consider any grain export regulation for now, but added that Russia could consider imposing a floating tariff on grain exports as a measure of last resort in 2015. [Related story]

Russian grain exports have been booming, boosted by a near record crop and a plunge in the value of the rouble currency. The pace of sales has fueled speculation the government might take steps to curb exports to make sure it has enough grain for domestic use.

“Russia could be in the beginning stages of a currency crisis because of the (fall in) crude oil,” said Mike Zuzolo of Global Commodity Analytics in Atchison, Kansas, adding, “They have to keep wheat as a primary force in trying to limit inflation.”

But some U.S. cash traders were skeptical, noting Russia has ample supplies following its near record harvest and is offering the cheapest wheat in the world.

Soybeans fell as spot December soymeal dropped below psychological support at $400 per short ton, despite the absence of any soymeal deliveries on first notice day for the contract.

“It’s my perception that (U.S. cash) meal offers are coming down,” said Tom Fritz with EFG Group in Chicago.

CBOT January soybeans ended down 31 cents at $10.16 a bushel, and March corn finished down 2-3/4 cents at $3.88-3/4 a bushel.

CBOT soyoil posted the largest declines by percentage, falling nearly four per cent on spillover weakness from crude oil, which also pressured Malaysian palm.

— Julie Ingwersen is a Reuters correspondent covering crop commodity markets from Chicago.

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