Chicago | Reuters — Chicago Board of Trade soybean and wheat futures rose on Friday, supported by a pick-up in Chinese demand for U.S. commodities, traders said.
But corn closed lower, giving up early gains with traders shrugging off a massive sale to China to focus on expectations for a weakened ethanol market as crude oil retreated.
CBOT soft red winter wheat futures notched their fourth straight day of gains and hit their highest since Feb. 24. Wheat rose 6.7 per cent this week, its biggest weekly gain in nine months, as demand for pasta and bread was expected to rise due to the coronavirus pandemic.
“Wheat has got sort of an interesting relationship with the coronavirus,” said Ted Seifried, chief market strategist for Zaner Ag Hedge. “During the run on the grocery stores, a lot of people forgot about being gluten free.”
CBOT May soft red winter wheat futures settled up 4-1/4 cents at $5.39-1/4 a bushel (all figures US$). CBOT May corn was down 1-3/4 cents at $3.43-3/4 a bushel and CBOT May soybeans were up 19-1/4 cents at $8.62-1/2 a bushel.
“Wheat prices continue to higher levels on heightened concerns of flour supplies,” CHS Hedging market analyst Ami Heesch said in a note to clients. “There is thought to be a real need for restocking the shelves at the grocery store.”
Chinese importers signed deals to buy U.S. corn and wheat in their first round of major purchases since Washington and Beijing signed a Phase One trade deal in January, the U.S. Agriculture Department said.
USDA also said that unknown buyers booked deals for 110,000 tonnes of U.S. soybeans. On Thursday, two trade sources with knowledge of the deal said that exporters sold soybeans to China.
Worries about supply disruption in South America due to the coronavirus pandemic fueled a rally in Chinese soymeal, which hit its highest in almost five months.
The 756,000-tonne corn sale, announced on Friday morning, was China’s biggest purchase of U.S. corn since July 2013.
But the weakness in crude oil that threatened to decimate the ethanol industry and pushed corn futures to their lowest since September 2016 on Wednesday outweighed any excitement about the Chinese deal.
“I think you’re possibly going to see an ongoing negative undertone in the corn market, unless you’ve got a lot more sales to underpin it, or offset the bearish tone in the energy market,” said Terry Reilly, senior analyst with Futures International in Chicago.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.