U.S. grains: CBOT wheat highest since April

Spec buying, export talk lift September wheat; other crops follow

Chicago | Reuters — U.S. wheat futures rose more than four per cent on Wednesday and touched a 2-1/2-month high as rising global cash prices and rumours of Chinese purchases triggered a round of speculative buying and short-covering, traders and analysts said.

Soybean and corn futures also rose despite outlooks for generally favourable weather and adequate rains in the Midwest.

Chicago Board of Trade September wheat settled up 24 cents at $5.50-3/4 per bushel after reaching $5.51-3/4, the contract’s highest since April 23 (all figures US$). CBOT November soybeans ended up 5-1/4 cents at $8.82-3/4 a bushel and December corn finished up 1/4 cent at $3.34 a bushel.

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Wheat led the way up. Analysts noted unconfirmed talk that China bought two cargoes of U.S. soft red winter wheat, but others said the rally in the often-volatile CBOT wheat futures market had more to do with commodity funds covering short positions.

“Money flow is coming into Chicago wheat. … We’ve seen this before, where the wheat market goes after the blood of the shorts,” said Terry Linn, analyst with Linn + Associates.

Traders also noted that top global importer Egypt booked Russian wheat at an international tender on Tuesday for $226.75 per tonne, including freight, up roughly $8 from what it paid at a similar tender a week earlier.

“That tells me that world prices are going higher,” said Tom Fritz, a partner with EFG Group in Chicago.

Soybeans rose on fresh demand from China and bullish monthly U.S. soy crushing data. The National Oilseed Processors Association said its members crushed 167.3 million bushels of soybeans in June, topping a range of trade estimates.

Chinese buyers booked at least 300,000 tonnes of U.S. soybeans on Wednesday, two U.S. export traders with knowledge of the deals said. In addition, the U.S. Department of Agriculture confirmed private sales of 389,000 tonnes of soybeans and 132,000 tonnes of corn to China.

The latest deals came despite concerns that the biggest buyer of U.S. agricultural goods would slow its import pace after U.S. President Donald Trump signed an executive order ending preferential economic treatment for Hong Kong.

Corn futures trailed the advances in wheat and soybeans as beneficial crop weather expected in most of the Midwest for the balance of July should bolster crop production.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.

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