Wheat steady after strong gains on Russia supply fears
Category: Grains
(Reuters) – U.S. wheat was steady on Friday after strong gains in the previous session on fears that Russia, the world’s fourth largest exporter of the grain, could soon exhaust its supplies.
FUNDAMENTALS
Chicago Board of Trade December wheat fell slightly to $8.91-1/4 a bushel, having jumped 2.77 percent in the previous session. New-crop wheat remains on track to end the week up 0.14 percent in its second weekly rise.
November soybeans dropped 0.2 percent to $17.43 a bushel after closing down slightly. The oilseed is down 0.74 percent so far this week, set for its first slide in six weeks.
December corn lost 0.19 percent to $7.97 a bushel, having closed up 0.98 percent. It is likely to mark its second consecutive weekly fall as it is down 0.28 percent so far this week.
A purchase of 475,000 tonnes of wheat from Russia, Romania and Ukraine by Egypt’s main state-run wheat buyer, spurred talk that Russia would exhaust supplies soon.
Russia has repeatedly denied that it would ban exports — as it did in 2010 after a historic drought — due to a poor crop this year.
Leading Russian grain analyst Dmitry Rylko, head of the Institute for Agriculture Market Studies told, a conference in Moscow that Russia could import as much as 2.5 million tonnes of wheat from neighbor Kazakhstan.
Speculation that the U.S. Department of Agriculture will raise its estimate of the soybean yield in its next update on the crop on Sept. 12 due to rains in recent weeks, has helped support the crop.
Closely-followed trade house INTL FC Stone on Wednesday pegged the 2012 U.S. soybean crop at 2.739 billion bushels, above the U.S. government’s forecast for 2.692 billion. However, the firm pegged corn output at 10.607 billion bushels, below the government forecast for 10.779 billion.
A large sale of U.S. corn totaling over 200,00 tonnes to an unknown destination as reported by the USDA also helped support prices. Export demand had been dented by prices rising to record highs this summer.
MARKET NEWS
The euro and commodity currencies like the Australian dollar held onto gains in Asia on Friday, while the safe-haven yen nursed heavy losses as markets cheered the European Central Bank’s plan to tackle the region’s debt crisis.
Oil prices settled higher but well off the day’s peaks on Thursday, supported by a drop in U.S. crude oil inventories, strong jobs data and the ECB announcement.
U.S. stocks closed at multi-year highs on Thursday, with the S&P 500 ending at its highest level since before the collapse of Lehman Brothers.
