SINGAPORE, Nov 20: Chicago wheat rose for a second straight session on Tuesday, lifted by renewed concerns over global supplies as U.S. Crop ratings dropped to a record low for the month of November following dry weather.
Soybeans eased after closing higher on Monday on expectations of a rebound in Chinese demand, while corn was little changed, holding on to last session’s 1.6 percent climb amid tight supplies.
The U.S. Agriculture Department said its rating of the winter wheat crop fell to 34 percent good-to-excellent, below analysts’ expectations, due to persistent dry conditions in the U.S. Plains.
The ratings were a record low for November and raised questions about how healthy the crop will be when it emerges from dormancy in the spring.
‘There is positive tone in the wheat market (on prices) as U.S. Crop ratings have dropped to a record low and we have lower production in Australia,’ said Lynette Tan, an analyst at Phillip Futures in Singapore.
‘Agricultural markets were supported by optimism in the financial markets yesterday but a firm dollar is weighing on commodities.’
The dollar index, which measures the strength of the greenback against a basket of currencies rose 0.1 percent on Tuesday, adding to pressure on commodity markets.
The wheat harvest in Australia, the world’s second largest exporter, is in full swing with framers reporting lower protein scales and poor yields.
The harvest in New South Wales and Queensland, the states that produce top quality hard wheat, contains less protein than usual, traders and farmers said, compounding expectations for lower national output.
The market expects to see an improvement in demand for U.S. Wheat as supplies tighten in Australia and Ukraine.
Chicago Board of Trade’s December wheat had added 0.3 percent to $8.44-1/2 a bushel by 0225 GMT. January soybeans fell 0.1 percent to $13.93 a bushel, while December corn gained a quarter of a cent to $7.39 a bushel.
TEMPORARY HALT
In the U.S. Cash market, spot basis bids for corn and soybeans held mostly steady across the Midwest on Monday as farmer offerings of each crop remained light despite a rally in Chicago futures, grain merchants said.
Soybean prices were supported on Monday by a temporary halt to regular state soy sales in China, which traders expect will lead to increased U.S. Sales to the world’s top soy importer.
Beijing is starting a stockpiling programme for soybeans to improve margins for soy plants and spur imports, according to the China National Grain and Oils Information Center (CNGOIC), an official think tank.
The USDA said 62 million bushels of soybeans were inspected for export last week, topping expectations for 53 million to 59 million. Weekly export inspections were 14.35 million for corn, above expectations, and 11.1 million for wheat, within expectations.
Separately, the USDA said private exporters struck deals to sell 20,000 tonnes of U.S. Soybean oil to unknown destinations.
Soybeans sank last week on an improved outlook for global supply, and on Monday were trading down 22 percent from an all-time high of $17.94-3/4 a bushel reached on September 4 as concerns about the drought peaked.
Commodity funds bought 11,000 CBOT corn contracts on Monday, trade sources said. They bought 4,000 soybean and 1,000 wheat contracts.
(agencies)
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