SINGAPORE, Oct 3: US wheat rose for a third session on Thursday, trading near its highest since late June on the prospect of strong demand and tightening global supply.
Corn gained around half a percent after sliding to a three-year low on Wednesday, while soybeans climbed further from Tuesday’s 19-month low as end users looked for bargains.
Wheat futures have risen almost 10 percent in three weeks on bets that strong demand from China and tighter supplies in the Black Sea region will result in higher demand for US cargoes.
Only four months into the marketing season, after large sales to Brazil and China, US exporters have already sold half of the 29.9 million tonnes of wheat forecast for export this year by the US Department of Agriculture.
Global wheat prices could find additional support on forecasts of crop-threatening frost in Australia’s eastern crop belt.
‘US wheat stocks are fairly tight and from the global perspective the tone of stories has been relatively friendly for the market,’ said Brett Cooper, senior markets manager at INTL FCStone Australia.
‘There is a frost threat in Australia on Friday and Saturday in New South Wales.’
Heavy rains in Ukraine will reduce winter grain sowing areas and slow exports, the country’s agriculture minister told Reuters this week. Exports also slowed out of Russia last month.
The Black Sea countries have routinely undercut offers from the US in recent years, capturing wheat export business to top buyers such as Egypt. The slowdown in exports from that region could push some demand to the United States.
The US Agriculture Department is shut down due to a budget impasse in Washington and is not issuing any reports, including daily announcements of export sales larger than 100,000 tonnes or the suite of export sales data that typically comes out on Thursdays.
Chicago Board of Trade front-month wheat climbed 0.4 percent to $6.88-1/2 a bushel by 0217 GMT, not far from Monday’s three-month high of 6.94-3/4 a bushel.
Spot-month soybeans were rose 0.4 percent to $12.78-1/4 a bushel and December corn advanced 0.4 percent to $4.40-3/4 a bushel.
Soybeans declined to a 19-month low on Tuesday, while corn fell to a three-year low in the last session, weighed down by rapid progress in the US harvest.
Rainfall late this week into the weekend in the US Midwest will slow harvesting of corn and soybeans, but drier weather is expected early next week, an agricultural meteorologist said on Wednesday.
Commodity Weather Group said the most notable impact on harvest from the rains, which it forecasts at 2.00 inches to 4.00 inches, would be on corn and soy in South Dakota, northern Iowa, Minnesota and Wisconsin.
Commodity funds bought a net 3,000 CBOT soybean contracts on Wednesday, trade sources said. They purchased 3,000 wheat and were even in corn.
(agencies)
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