GRAINS-WHEAT EASES AFTER WEATHER RALLY; SOY LOWER ON U.S.-CHINA RISKS
Category: Grains
(Agricultural.com) – Chicago wheat eased on Friday after this week’s steep rally on signs of drought-hit yields in the southern U.S. Plains and concern over dry conditions in other major wheat-growing zones around the world.
Soybeans fell as an inconclusive end to two-day trade talks between U.S. and Chinese officials returned attention to the risk that lucrative U.S. soybean sales to China could dry up. Corn edged lower, curbed by forecasts of rain relief for parched corn belts in Brazil.
The subdued trend in grains also reflected wider cautioun among investors before closely followed U.S. jobs data due at 1230 GMT. The Chicago Board of Trade’s most-active wheat contract was down 1.3 percent at $5.31-1/4 by 1206 GMT, but still up 6.6 percent over the week after reaching its highest since July in the previous session.
Scouts on a Wheat Quality Council crop tour on Thursday projected 2018 wheat production in Kansas, the top U.S. wheat-growing state, at 243.3 million bushels, potentially the smallest crop since 1989.
“Currently the (wheat) price is being driven up by reports of winter wheat plants being in poor condition in Kansas, the most important U.S. growing state, and elsewhere,” Commerzbank analysts said in a note.
“That said, global wheat stocks are at a record level after five consecutive years of surplus, which argues against any continued price rise.” Emerging concerns about dry weather in countries including Australia, Russia and Canada have also contributed to this week’s rally on wheat markets, though traders said it was too early to predict crop damage.
The most active CBOT soybean contract was down 1.3 percent at $10.39-1/4 a bushel while corn retreated by 0.4 percent to $4.06-1/4. Top officials from China and the United States reached a consensus on some aspects of the countries’ trade row, but disagreements over other issues remain “relatively big”, China said on Friday.
Signs that U.S soybean sales to China – the most valuable part of U.S. farm exports to China – have been drying up in recent weeks amid the mounting trade tensions have weighed on Chicago futures this week.
However, soy markets were still finding support in the weather-worn harvest in Argentina, where heavy rain was slowing harvesting of a crop already diminished by drought.
