U.S. grains: Wheat soars as Russia eyes export curbs

Tightening supplies underpin corn, soybeans

CBOT March 2021 wheat with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. wheat futures surged on Friday on concerns about thinning global supplies after the U.S. Department of Agriculture (USDA) slashed its grain stocks outlook and as top supplier Russia pondered export curbs.

Corn and soy futures also rose as tightening supplies, particularly of soybeans, and lingering concerns about South American crops amid dry early-season weather supported prices.

Chicago Board of Trade (CBOT) wheat posted its strongest weekly gain in nearly four months, while corn notched its fifth weekly gain in six weeks. Soybeans dipped slightly on the week in a second straight weekly decline.

Grain markets were propelled higher on Friday by surging wheat a day after USDA cut its supply outlook and as Russia considers imposing a wheat export tax and a grain export quota to help stabilize rising domestic food prices.

Russian officials are considering imposing a wheat export tax for the period of Feb. 15 to June 30, four sources familiar with discussions told Reuters Friday.

Sources familiar with government plans said the tax could be set at around 2,000 roubles (C$34.40) per tonne; one source said a tax of 25 euros (C$38.76) is also under consideration.

That source also said the government plans to introduce temporary quotas for overseas shipments of wheat, rye, barley and maize.

Meanwhile, Russia’s Sovecon agriculture consultancy downgraded its 2021 wheat crop forecast on Friday, citing the worst crop conditions in a decade.

“Global wheat stocks in that report were five million tonnes below trade expectations, U.S. stocks came down and there’s news about Russia wanting to put quotas and taxes on exports. Wheat is rightfully leading this market higher,” said Craig Turner, senior ag broker at Daniels Trading.

CBOT March wheat futures ended up 18 cents at $6.14-1/2 a bushel (all figures US$). A three-day rally has taken March futures up 7.8 per cent, the strongest such gain since July.

January soybean futures were up 7-3/4 cents at $11.60-1/2 a bushel, while March corn gained 2-1/4 cents to $4.23-1/2 a bushel.

Investors are monitoring South American corn and soy prospects following dry early-season weather in key production areas.

Widespread rains are expected in central and southern Brazil and northern Argentina next week, while a drier pattern envelops northern Brazil, according to meteorologists.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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