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GRAINS-Wheat set for 2nd week of gains, soybeans up on higher U.S. exports

Chicago wheat futures edged higher on Friday with the market set for its biggest weekly rise in two months as dry weather in key producing regions across the world reduces supplies. Soybeans gained ground, poised for a second week of gains on better than expected U.S. weekly exports and expectations of the higher demand from Europe.

The most-active wheat futures on the Chicago Board of Trade have risen 4.6 percent this week, extending two-week gains to nearly 9 percent. Soybean futures are up 1.7 percent this week and corn has climbed 2 percent with both markets on course to rise for a second week. Wheat prices were supported by fears over dry weather in Australia, Europe and Russia. Results from the second day of the Wheat Quality Council’s tour of key U.S. spring wheat production areas projected crop yields at 41.1 bushels per acre, below the tour’s five-year average of 45.4 bushels.

World wheat production is set to fall to a five-year low following significant downgrades to crop prospects in the European Union and Russia, the International Grains Council said on Thursday. The inter-governmental body cut its forecast for world wheat production in 2018/19 by 16 million tonnes to 721 million, the lowest total since the 2013/14 season. Weekly U.S. exports supported soybeans. The U.S. Department of Agriculture on Thursday said weekly export sales of soybeans totalled 1.502 million tonnes, topping trade forecasts that ranged from 400,000 to 900,000 tonnes.

“The U.S. soybean price discount (to Brazilian beans) was reduced by $5 a tonne to $56,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. “And that suggests at least some players are happy to accumulate U.S. beans at that discount.

China’s tariffs do make US beans more expensive – but only by so much.” U.S. President Donald Trump said on Wednesday that Europe had agreed to import more American soybeans, aiding U.S. farmers as the two sides launch talks on cutting other trade barriers, easing the threat of a transatlantic trade war.

But many observers in Europe considered the moves as symbolic as the European Union does not impose tariffs on soybean imports, limiting the impact on the futures market. Commodity funds were net sellers of CBOT soybean, wheat and soyoil contracts on Thursday, traders said. They were net buyers of corn and soymeal contracts.

 Grains prices at 0305 GMT
 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  539.25  2.75     +0.51%   +5.68%       501.29  70
 CBOT corn   376.50  0.75     +0.20%   +2.87%       368.91  67
 CBOT soy    879.50  3.50     +0.40%   +0.72%       880.85  63
 CBOT rice   11.96   -$0.04   -0.33%   -0.79%       $11.97  44
 WTI crude   69.58   -$0.03   -0.04%   +0.40%       $69.98  51
 Currencies                                                 
 Euro/dlr    $1.165  -$0.003  -0.29%   -0.34%               
 USD/AUD     0.7387  -0.003   -0.44%   +0.11%               
 
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 hundredweight
 RSI 14, exponential

Source: Reuters (Reporting by Naveen Thukral; Editing by Sunil Nair)

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