Chicago | Reuters — U.S. wheat futures climbed for a second straight day on Thursday on bargain buying following the market’s recent drop and on a weather-reduced wheat crop in Russia, the world’s top exporter.
Corn followed wheat higher, underpinned by concerns that heavy rains and flooding in parts of the U.S. Midwest could drag down crop prospects.
Soybeans fell on continued worries about poor demand from China amid rising trade tensions between the U.S. and the world’s top soybean importer.
A weaker U.S. dollar gave grain markets underlying support on hopes that the currency move could, along with lower grain prices, ignite better export demand.
“People are bottom picking and trying to take advantage of these lower prices,” said Terry Reilly, senior commodities analyst with Futures International.
“But with soybeans, there’s ongoing talk that Brazil is taking away Chinese business from the U.S. with the ongoing trade war,” he said.
Chicago Board of Trade July soft red winter wheat rose seven cents, or 1.4 per cent, to $4.95-1/4 a bushel (all figures US$). Technical buying following the contract’s close above its 200-day moving average on Wednesday supported prices.
A sharply lower Russian wheat production forecast by French consultancy Agritel also fueled buying. The group said Russia’s crop would drop to 67.4 million tonnes this year, down 21.5 per cent from the prior year’s record crop following adverse weather that hit the country’s winter and spring crops.
Bad weather has also hit the wheat crop in China, the world’s top producer and consumer of the grain.
CBOT July corn gained 2-3/4 cents, or 0.8 per cent, to $3.57 a bushel on bargain buying following recent lows and after widespread rains in the heart if the Midwest corn belt caused localized flooding that submerged some crops.
Pressure from lower-than-expected weekly export sales in a U.S. Department of Agriculture report on Thursday was offset by news of continued buying by importers in South Korea, which have been actively booking corn purchases amid lower prices.
CBOT July soybeans fell nine cents, or one per cent, to $8.80-1/2 a bushel, with prices holding within a narrow range during the session after volatile trading earlier in the week that saw the market fall to a 9-1/2 year low.
“Grain markets are waiting for further news from the world’s largest economies on their next step in the trade wars,” U.S. brokerage Allendale said in a note.
— Karl Plume reports on agriculture and commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.