U.S. grains: Wheat tops one-week high on Russia export concerns

Grain storage at a Russian seaport. (Pridannikov/iStock/Getty Images)

Chicago | Reuters — U.S. wheat futures jumped to their highest prices in more than a week on Friday on concerns that top-exporter Russia may curb grain exports, traders said.

Russia will consider restricting 2018-19 shipments once they reach 30 million tonnes, following a request from meat-producing regions, according to traders who met with the agriculture ministry.

The ministry denied it discussed export curbs. However, the meeting still added to doubts about Russia’s ability to export a projected 35 million tonnes of wheat.

Constraints on Russian exports would typically increase demand for wheat from the European Union, but the bloc’s harvests have suffered from unfavourable dryness, said Arlan Suderman, chief commodities economist for U.S. broker INTL FCStone. Drought has also lowered production in the Black Sea region and Australia.

“With the smaller crop in Europe this year, the demand would shift to the United States,” Suderman said.

Most-active wheat futures climbed 3.2 per cent to $5.79-3/4 a bushel at the Chicago Board of Trade (all figures US$). Earlier in the session, the contract hit $5.82-3/4, its highest price since Aug. 7.

Most-active soybean futures slumped 0.5 per cent to $8.92-3/4 a bushel. Corn futures dipped 0.3 per cent to $3.78-3/4 a bushel, after reaching their highest price since Aug. 10 at $3.82-1/2.

Soybeans and corn pared their losses in late trading after the Wall Street Journal reported that the U.S. and China are working on a plan to resolve their trade dispute by November.

China is the world’s top importer of soy and last year bought shipments from the U.S. worth some $12 billion, making the oilseed America’s top farm export to China. The trade standoff, however, has prompted Beijing to impose extra tariffs on imports of U.S. soybeans and shift its purchases to Brazil.

On Thursday, soybean futures rallied when China’s Ministry of Commerce said a delegation will travel to the U.S. for bilateral trade talks this month.

“There is still a lot to overcome between the two countries and we don’t want to get too carried away buying beans until more is known,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.

“Certainly talking is better than not talking.”

Expectations that U.S. farmers will harvest their biggest soy crop ever this autumn and produce record corn yields also hung over the markets.

Next week, traders will digest the results of an annual U.S. crop tour that will assess the condition of hundreds of corn and soy fields stretching from Ohio to Nebraska.

— Tom Polansek reports on agriculture and commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Nigel Hunt in London.

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