U.S. grains: Wheat retreats from five-week high

Chicago | Reuters — U.S. wheat and corn futures closed lower on profit-taking and a lack of market-moving news on Thursday while soybeans firmed, buoyed by concerns about the size of Brazil’s crop.

Chicago Board of Trade (CBOT) March wheat settled down 4-1/2 cents at $5.21-1/2 per bushel (all figures US$). CBOT March corn ended down 1-3/4 cents at $3.77 a bushel while March soybeans finished one cent higher at $9.16 a bushel.

Wheat futures turned down as traders booked profits after the March contract climbed to $5.29, its highest since Dec. 19. The market has drawn support from expectations of a pickup in export demand as Russian supplies dwindle.

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Even though Russian wheat remains cheaper than U.S. grain, the discount has tightened to about $15 a tonne on a free-on-board basis, from more than $50 a tonne in August, according to Refinitiv Eikon data.

“This could provide an opportunity for U.S. wheat to make its way into Asia and the Middle East,” said Phin Ziebell, agribusiness economist at National Australia Bank.

Traders showed little reaction to a plunge in temperatures across the U.S. farm belt. Recent snows should insulate much of the dormant U.S. winter wheat crop, although wintry conditions may slow the movement of grain on roads and rivers.

“Despite the extreme cold expected in the Midwest, winterkill threats are fairly limited, as snowfall is expected to be sufficient in most areas,” Radiant Solutions said in a client note.

CBOT soybean futures drew support from news that Brazil’s Parana state, the country’s second-largest soybean producer, cut its forecast for its 2018-19 harvest to 16.8 million tonnes, from 19.1 million previously, after a dry spell last month.

Emater, the agricultural research body in Rio Grande do Sul, Brazil’s No. 3 soy state, also warned of agricultural losses, citing excessive rains.

‘Miles and miles’

Traders remained on edge about the U.S.-China trade war. The United States is “miles and miles” from resolving trade issues with the world’s top soy importer, but there is a fair chance the two countries will get a deal, U.S. Commerce Secretary Wilbur Ross said.

A 30-member delegation from China plans to come to Washington next week for talks, Ross said, as the world’s two largest economies try to meet a March 1 deadline to resolve their trade disputes.

Looking ahead, U.S. farmers are likely to plant corn on 90.3 million acres in 2019, up 1.3 per cent from 2018, and cut soybean plantings to 84.6 million acres, down about five per cent year-on-year, according to the results of a Farm Futures email survey of 626 growers.

The survey projected U.S. all-wheat plantings for harvest in 2019 at 46.6 million acres, down from the 47.8 million acres seeded for 2018.

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

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