Wheat futures extended gains and reached the highest levels in over 18 on Wednesday with potential export curbs by Russia underpinning prices, Reuters reported.
The Chicago March future was at a six-month high on expanded export business and word that Russia may limit wheat exports through June. Corn and soybean futures were steady or drifted lower a day before the expected signing of the long-awaited phase one of the U.S.-China trade deal. March corn eased ½c to close at $3.89 per bushel (bu).
Chicago March wheat added 6¼c to close at $5.68½ per bu. Kansas City March wheat advanced 4¼c to close at $4.97 a bu. Minneapolis March wheat edged up ¾c to close at $5.56 a bu. March soybeans were steady at $9.42¼ a bu, though August 2020 and beyond declined. March soybean meal shed $1.80 to close at $302 per ton. March soybean oil edged up 0.01c to 33.64c a lb.
“More signs of tighter supply are emerging,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.
“Egypt is paying higher prices for wheat at their tender. Market chatter also has it that Russia is considering capping wheat exports in the first half of 2020 to preserve domestic supply.”
Russia’s agriculture ministry is looking to set a non-tariff quota for grain exports of 20 million tons in January-June, it said in a statement on Tuesday, adding the quota would be scrapped later in the most active part of the season for trading.
“Some market participants are warning that the planned restriction could be the first step towards further-reaching measures. Only in this event would any genuine limitation of the Russian wheat supply come into play, thereby increasing demand for wheat from the EU,” Commerzbank said in a note. “The market already appears to be pricing this in.”
European wheat futures’ benchmark March hit a more than one-year high at 195.75 euros ($218.16) a ton on Wednesday. Egypt’s main state wheat buyer purchased 240,000 tons of Russian and Romanian wheat in an international purchasing tender.
