PARIS/SINGAPORE: Chicago wheat fell further on Tuesday as the market sought clearer indications on Russian export policy, while talk that traders may step up shipments to avoid potential restrictions later in the season also weighed on prices.
Corn edged lower, again pressured by wheat although losses were limited as investors awaited more pointers on U.S Midwest harvest yields.
Soybeans were little changed, capped by uncertainty over whether Chinese-US trade talks this week would ease tensions.
The most-active wheat contract on the Chicago Board of Trade was down 1.2 percent at $5.55-3/4 a bushel by 1143 GMT, having closed down about 3 percent on Monday when it gave up similar-sized gains from Friday.
Speculation about potential export limits in Russia, the world’s biggest wheat supplier, pushed global wheat prices sharply higher on Friday, adding to worries about tightening global supplies following drought in Europe, the Black Sea region and Australia.
The rally was sparked by news of a meeting between the Russian agriculture ministry and exporters. But the ministry’s denial it had mentioned restrictions helped cool speculation.
“Russia denies it is impeding wheat exports so the market, for now, relaxes,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
Some traders said the higher probability of export restrictions in the second half of the 2018/19 season could prompt exporters to sell more quickly in the coming months, adding to short-term price pressure.
Smaller than expected US wheat export inspection volumes on Monday also cooled hopes about reduced supply in other regions shifting demand towards the United States.
Analysts said the market still needed a clearer picture of Russia’s wheat harvest, which is reaching spring wheat regions, while attention was also turning to crop prospects in southern hemisphere exporters Argentina and Australia.
“The market is looking for the next catalyst,” Michael Magdovitz, commodity analyst at Rabobank, said of wheat. “It’s a bit early to see a curtailing of Russian exports.”
CBOT soybeans ticked down 0.1 percent to $8.92-1/2 a bushel and corn eased 0.4 percent to $3.75 a bushel.
US President Donald Trump told Reuters on Monday he did not expect much progress from trade talks with China this week in Washington.
A standoff between the countries has seen Beijing put extra tariffs on US soybeans, slowing shipments of American supplies to the world’s biggest importer of the oilseed.
“Geopolitics is going to remain the overriding price-determinant for CBOT soybeans,” Magdovitz said.
Corn and soybean investors were also assessing US crop prospects.
The US Department of Agriculture on Monday lowered its weekly ratings for corn and soybeans, with its soybean rating below market expectations, but initial feedback from the widely followed Pro Farmer Midwest crop tour confirmed strong yield potential.
Source: Brecorder
