Chicago wheat rose for the fourth time in five sessions on Wednesday, in a rally that has been buoyed by strong export prospects and fund short-covering.
Nearby corn ended slightly lower as traders adjusted positions ahead of Thursday’s U.S. Thanksgiving holiday. Soybeans surrendered earlier gains on profit-taking and weakness in soymeal.
A major new wheat purchase by Egypt, the world’s top importer, underlined robust global demand, as its buying agency bought 60,000 tonnes of French wheat.
“I think it just sent out a message that the U.S. is competitive and global prices are indeed coming up a little bit,” said Tom Fritz, a partner at EFG Group in Chicago.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Part of U.S. wheat’s competitiveness in world markets is linked to recent weakness of the dollar, said J. Mark Kinoff, president of Ceres Hedge in Chicago. The greenback was up slightly on Wednesday.
Chicago Board Of Trade front-month December wheat rose 0.7 per cent, or 4-3/4 cents, to $6.51-1/4 a bushel (all figures US$).
The market was also digesting several other developments that pointed to robust global wheat demand.
Libya’s agriculture minister told Reuters on Wednesday that while the country has sufficient wheat stocks, it will resume imports soon to meet domestic needs.
China’s Xinhua News Agency reported earlier in the day that China sold, at auction, a larger percentage of the reserve wheat it had available, at a higher average price than the previous week.
Major Australian wheat customer Indonesia said it was looking elsewhere for food imports because of a diplomatic rift with Australia, while harvest problems in Australia and Argentina have also brightened U.S. export prospects.
There’s also a weather worry supporting wheat.
Frigid weather headed to the U.S. Plains states next week will push the young wheat crop into dormancy and cause damage if snow fails to blanket the crop before the arctic blast hits, agricultural meteorologist Don Keeney of Cropcast told Reuters online Ags Forum on Wednesday.
December corn eased 0.3 per cent, or 1-1/4 cents, to $4.17-1/4 per bushel.
January soybeans shed 0.7 per cent, or 9-1/4 cents, to $13.20 a bushel after touching their highest since Sept. 19.
Investors took profits on soybeans after they finished higher in three of the previous four sessions, traders said.
The rally was fueled by a surge in the December soymeal contract and strong demand from China. But soymeal turned weaker as some investors trimmed long positions ahead of Thursday’s holiday and Friday’s first notice day for deliveries against the December soymeal contract, Fritz said.
Firm cash markets for U.S. soymeal should prevent any deliveries of that commodity on Friday, traders said.
U.S. exporters reported the sale of 235,000 tonnes of U.S. soybeans to unknown destinations, the U.S. Department of Agriculture said on Wednesday, marking the fourth straight business day that it has reported large individual U.S. soybean sales.
— Rod Nickel is a Reuters correspondent based in Winnipeg. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.
