December 19, 2014 – Reuters –
Chicago Board of Trade wheat futures surged 4 percent on Wednesday, rising for a fifth straight session on worries that Russia, a key global supplier, might restrict exports to cool domestic prices, traders said. Strong US ethanol production bolstered corn, while soyabeans firmed on technical buying. CBOT March wheat settled up 25-1/4 cents at $6.48-1/2 per bushel, after reaching $6.50-3/4, the highest spot price on a continuous price chart since May 23.
March corn ended up 2-1/4 cents at $4.08-1/4 a bushel, and January soyabeans rose 3-1/2 cents at $10.27 a bushel. Russia remained in the spotlight as it tackles a financial crisis linked to plunging oil prices and Western sanctions. As a major wheat exporter, analysts say Russia is keen to avoid formal grain export curbs which might damage relations with its customers.
But the country is stepping up other measures, such as quality controls, that can prevent grain from leaving the country. Deputy Prime Minister Arkady Dvorkovich told grain exporters at a meeting that the government was using all informal instruments to restrict grain exports, two sources said. Forecasts for colder weather in the southern US Plains lent support.
“Weather models are turning colder for Christmas weekend, so we are increasing the winterkill threat for the north-west 15 percent of the Plains hard red winter wheat belt,” said Arlan Suderman, analyst with Water Street Solutions. Other traders suspected the strength in wheat had more to do with technical moves by commodity funds, given that Russia’s currency crisis has not boosted export demand for US wheat.
CBOT corn got a boost when the US Energy Information Administration reported US ethanol production in the latest week at 990,000 barrels per day, a record high. Also supportive was a top Chinese government official telling US Agriculture Secretary Tom Vilsack that China approved imports of a type of genetically modified corn at the center of lawsuits over US grain shipments rejected by Beijing. Soyabeans advanced on technical buying led by soyameal after the January meal contract rallied from a near two-week low just above $353 per short ton. But gains were limited by improving prospects for crops in South America. Wheat Price, Wheat, Wheat Market, Wheat Cultivation,