U.S. grains: Wheat up as crop ratings, Russia news spur short-covering

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago wheat futures rose on Tuesday as a decline in U.S. crop ratings and news of radioactive pollution in the Ural mountains triggered a round of short-covering and concern about wheat exports from Russia, the world’s top supplier.

Corn and soybean futures closed little changed after a choppy session.

Chicago Board of Trade December wheat settled up 2-3/4 cents at $4.24-3/4 per bushel after reaching $4.28-3/4, its highest in a week (all figures US$).

CBOT December corn ended steady at $3.45 a bushel after touching $3.45-3/4, its highest since Nov. 9. January soybeans fell one cent to $9.89 a bushel.

Wheat firmed after Russia’s meteorological service said it had measured pollution of a radioactive isotope at nearly 1,000 times normal levels in the Ural mountains. That marked the first official Russian data supporting reports that a nuclear incident had taken place in Russia or Kazakhstan in the last week of September.

Neither Russia nor Kazakhstan has acknowledged any accident.

“That is still not seen to be high enough to create human or environmental risks, but traders holding large short positions are reducing their risk exposure a bit today,” INTL FCStone chief commodities economist Arlan Suderman said in a note to clients.

The Russian news reminded some traders of the Chernobyl nuclear disaster of 1986, which sparked a rally in CBOT grain futures. But others were skeptical about the market impact of the contamination, and attributed strength in wheat to technical buying.

“This isn’t Chernobyl. Everybody wants it to be something bigger than it is,” said one Chicago-based trader.

Russia is the world’s biggest wheat exporter, and its farmers just completed the harvest of a record-large crop.

Wheat also drew support from the U.S. Department of Agriculture’s weekly crop conditions report late Monday. The government rated 52 per cent of the winter wheat crop in good to excellent condition, down from 54 per cent the previous week, despite analyst expectations for no change.

CBOT corn ended flat, erasing gains after front-month December pushed to a 1-1/2-week high. USDA late Monday said the U.S. corn harvest was 90 percent complete, behind the five-year average of 95 per cent, while the soybean harvest was 96 per cent done, near the five-year average of 97 per cent.

“The U.S. corn and soybean harvests are approaching their end very rapidly now as the USDA said on Monday and there do not seem to be too many problems being faced,” said Graydon Chong, senior commodity analyst with Rabobank. “This is a weakening factor today with large U.S. supplies coming onto the world market.

“But the downside for corn is limited by the large short position held by investment funds in corn,” Chong said.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

About the author

explore

Stories from our other publications