U.S. grains: Wheat snaps rally, soy firm, corn flat

(Michael Thompson photo courtesy ARS/USDA)

Chicago | Reuters –– U.S. wheat futures fell on Wednesday on fund-driven technical selling and a proposal by Russia’s farm ministry to cut a wheat export tax, which tempered speculation about export restrictions.

Corn coasted for the second straight day, while soybean futures rose on dry weather concerns in South America and southern Africa.

At the Chicago Board of Trade, March wheat settled 8-1/4 cents lower at $4.76-1/2 per bushel, a day after hitting $4.88-1/2, its highest since Dec. 21 (all figures US$).

March corn finished unchanged at $3.69-1/4 per bushel while March soybeans settled up 6-1/2 cents at $8.83 a bushel, the contract’s biggest daily rise in two weeks.

Wheat fell for the first time in five sessions in largely technical trade as the market awaited fresh fundamental news.

“We are in a pattern of seeing short-covering rallies run out of steam,” said Joe Davis, director with Futures International in Chicago. “Usually this time of year we have weather and acreage talk grab headlines, and we are not seeing much of that this year,” Davis said.

Wheat rallied earlier this week on talk that Russia, a top exporter, could toughen grain export terms to help curb domestic food prices. But Deputy Agriculture Minister Evgenii Gromyko said on Wednesday his ministry had proposed removing or reducing a wheat export tax, and imposing one on corn and barley.

“If they reduce the (wheat) tax, that just makes more wheat in the world,” said Jason Roose, analyst and vice-president of U.S. Commodities.

The introduction of a corn export tax by Russia could boost a corn market in which weather-related production losses in southern Africa are seen trimming large worldwide supplies.

CBOT soybeans rose, with the spot March contract settling above its 100-day moving average. The soy complex drew support from concern about dryness in crop areas in Argentina.

“(O)ur forecast offers little relief for the driest 20 per cent of the belt,” the Commodity Weather Group said in a note to clients, adding, “Minor reductions in yield potential are expected, although a lack of heat will mitigate stress to some extent.”

Justin Madden reports on crop commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Colin Packham in Sydney and Gus Trompiz in Paris.

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