U.S. grains: Wheat rebounds on bargain buying, corn follows

Chicago | Reuters — U.S. wheat futures jumped three per cent on Friday, rebounding from an eight-week low on a round of technical buying and short-covering ahead of the weekend, traders said.

The gains in wheat pulled corn futures slightly higher but expectations for a bumper U.S. harvest stifled rally attempts. Soybeans closed lower on fresh concerns about the trade fight with China limiting exports of what the U.S. Agriculture Department has forecast to be a record crop.

“Wheat is leading gains with the Chicago contract bouncing off the psychological $5 per bushel level, Russia still in the news and most major exporters still dealing with dry weather concerns,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients.

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“Corn and soy have no such impetus to rebound from lows, confined there as another solid U.S. growing season winds down and harvest begins across the Midwest.”

The benchmark Chicago Board of Trade December soft red winter wheat contract settled up 14-1/2 cents at $5.11-1/2 a bushel, snapping a three-session losing streak (all figures US$).

CBOT wheat rose 0.1 per cent this week.

Dealers said wheat supplies remained fairly tight and major physical buyers were taking advantage of recent price weakness to step up purchases.

Tunisia’s state grains agency purchased 67,000 tonnes of milling wheat, 75,000 tonnes of durum and 50,000 tonnes of barley in a tender on Friday, traders said.

Earlier this week Egypt’s state grain buyer purchased 235,000 tonnes of wheat at an international tender while Algeria bought 630,000 tonnes.

The flurry of export activity underpinned the wheat market even as U.S. shippers struggled to compete for the business.

CBOT December corn futures were 1-1/4 cents higher at $3.51-3/4 a bushel and CBOT November soybeans were off 2-3/4 cents at $8.30-1/2 a bushel.

U.S. President Donald Trump has instructed aides to proceed with tariffs on about $200 billion more Chinese goods, despite Treasury Secretary Steven Mnuchin’s attempts to restart trade talks with China, a source familiar with the decision said.

“The biggest potential swing factor to the U.S. balance sheet is its export number, and any change to the tariff situation in the U.S. could support U.S. beans,” said Jonathan Lane, trading director at U.K. merchant Gleadell.

CBOT soybeans fell 1.6 per cent this week while CBOT corn shed 4.2 per cent.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore and Nigel Hunt in London.


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