U.S. grains: Wheat up two per cent on Russia export uncertainty, technicals

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Chicago Board of Trade wheat futures rose two per cent on Monday on a mix of chart-based buying and uncertainty over Russian grain export policy, traders said.

Soybeans fell, pressured by a monthly industry report showing a smaller-than-expected November soy crush. Corn ended higher, but gains were limited by stepped-up farmer selling.

At the CBOT, March wheat settled up 12-1/2 cents at $6.19 per bushel (all figures US$). January soybeans ended down 7-3/4 cents at $10.39-1/2 a bushel, and March corn added one cent to $4.08-1/2 a bushel.

Technical buying in wheat accelerated as the March contract broke through resistance at its 200-day moving average near $6.16.

“My thinking is it’s a continuation of fund buying. There is nothing in the world markets that I see that would tell you to buy wheat 15 (cents) higher today,” said Joe Christopher of Crossroads Cooperative in Sidney, Nebraska.

Some traders said commodity funds were covering short positions on concerns that Russia, a major global grain supplier, might slow exports at a time when the tumbling ruble currency was raising domestic prices.

Russia should limit grain exports through companies registered offshore, the country’s agriculture minister told the TASS news agency, suggesting a way the government could curb exports while avoiding an embargo.

Soybeans were pressured by lighter-than-expected monthly usage. The National Oilseed Processors Association said its U.S. members crushed 161.2 million bushels of soybeans during November, the most ever for the month. But the figure fell below the average analyst estimate of 165.4 million bushels.

Corn rose on technical buying and expectations that China might approve a genetically modified variety soon, potentially ending a disruption of U.S. shipments to the Asian country.

But gains were limited by producers selling some of their record-large 2014 harvest as prices hovered at five-month highs above $4 a bushel.

“The farmer selling is keeping a lid on the rally. The farmer selling has been really, really big,” said Roy Huckabay with the Linn Group, a Chicago brokerage.

— Julie Ingwersen is a Reuters correspondent covering ag commodity markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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