U.S. grains: Wheat up for third day in a row

A wheat crop in progress on May 24, 2016 north of London, Ont. (Ralph Pearce photo)

Chicago | Reuters — U.S. wheat futures rose on Thursday, their third straight day of gains, on worries that adverse weather will lead to crop shortfalls in key growing areas around the world, traders said.

Soybean futures fell, pressured by fresh concerns about exports. Corn futures closed lower on long liquidation by funds after failing to hold support above key technical points.

The grain markets also were monitoring the progress of trade talks between the U.S. and key export customers China and Mexico.

Chicago Board of Trade July soft red winter wheat futures settled up 3-1/4 cents at $4.97-1/2 a bushel (all figures US$).

“There’s still plenty of concern over how this winter wheat crop will wind up, despite stronger-than-expected production estimates and rising ratings,” Matt Zeller, director of market information at INTL FCStone said in a note to clients. “Dryness is creeping in to crops for major producers/exporters Australia and Russia, adding to at least a minor bullish story heading to 2018-19.”

Australian farmers are planting wheat in some of the driest soils in years, following a severe drought that cut 2017-18 output in the world’s fourth-largest exporter to the lowest in a decade.

“There is some support for the wheat market at current levels because of a drought in the U.S. southern Plains. The USDA is showing some improvement in crop rating but there will be yield losses,” said one India-based agricultural commodities analyst.

CBOT July soybean futures were down 4-3/4 cents at $9.95 a bushel.

The soybean market is focused on the outcome of trade talks between the United States and China. Chinese demands for U.S. shipments have taken a hit since Beijing proposed import duties last month.

The U.S. and China launch a second round of trade talks on Thursday to try to avert a damaging tariff war, with the Trump administration demanding a $200 billion cut in China’s U.S. trade surplus and greater protections for intellectual property.

President Donald Trump said on Thursday that China and other countries had become “very spoiled” on trade.

The U.S. Agriculture Department on Thursday morning said that soybean export sales totalled 506,600 tonnes in the latest week, near the low end of forecasts that ranged from 400,000 to one million tonnes.

CBOT July corn futures closed four cents lower at $3.95-1/4 a bushel.

Corn firmed early but turned lower after failing to hold support above its 10-day moving average.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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