U.S. grains: Bargain buying lifts CBOT wheat

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Chicago | Reuters — U.S. wheat futures rose on Wednesday on bargain buying after a three-session sell-off pushed the Chicago Board of Trade September contract to a one-week low, traders said.

CBOT soybeans and corn ended flat to firmer, consolidating after recent declines and as investors awaited two key U.S. government crop reports later this week.

CBOT September wheat settled up 5-1/2 cents at $4.88-1/2 per bushel (all figures US$). August soybeans ended unchanged at $8.73 a bushel and September corn rose 1/2 cent to $3.61-3/4 a bushel.

Wheat climbed the most, with the September contract up about one per cent after falling in eight of the previous 10 trading sessions.

The wheat market has faced seasonal pressure from the ongoing U.S. winter wheat harvest and falling prices in Russia, the world’s top exporter, despite poor weather curbing Russian crop prospects.

“There is just so much supply out there in the world, and with old-crop stocks, that there is no incentive to step in and buy the market,” said Brian Hoops, analyst with Midwest Market Solutions.

Minneapolis Grain Exchange (MGEX) spring wheat futures bucked the firm trend in CBOT wheat and continued to fall, posting fresh contract lows across the board. The breakdown in MGEX spring wheat reflects improving weather in the northern U.S. Plains and Canadian Prairie crop belts.

“We’ve got ideal weather moving forward, at least for the next seven to 10 days. It looks like a bumper crop coming at us in about six weeks,” said Joe Nussmeier, a broker with Frontier Futures in Minneapolis, noting that the northern Plains’ spring wheat harvest should start in early August.

Soybean futures were choppy, firming at times on hopes for a thaw in U.S. trade relations with China, the world’s biggest soy importer. U.S. President Donald Trump’s administration unveiled a plan for a stronger security review process for foreign investors acquiring U.S. technologies, softening its tone from previous remarks indicating it would specifically block Chinese investments.

“Is it an olive branch to China? I’m not sure, but that’s how the trading is looking at it,” said Matt Connelly, an analyst at the Hightower Report in Chicago.

But rallies were capped by generally favourable weather in the U.S. Midwest that has bolstered yield prospects for soybeans and corn.

Traders were also bracing for the U.S. Department of Agriculture’s acreage and quarterly stocks reports on Friday.

Analysts surveyed by Reuters on average expect USDA to raise estimates of U.S. 2018 corn and soybean plantings from its March forecasts, and to report multiyear highs in U.S. June 1 corn and soy stockpiles.

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

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