Wheat slumps on beneficial rains, Russian export policies
Chicago wheat futures dropped sharply, settling down 16-3/4 cents at $5.72-3/4 a bushel, with a 4.4% decline for the week. Rains in key wheat-growing regions, including southern Russia and the central U.S., alleviated dryness concerns. Russia’s new export policy, selling directly to sovereign buyers, has raised fears among U.S. grain traders about excess supply.
CHICAGO, Oct 18 (Reuters) -Chicago wheat futures fell sharply on Friday as rains were expected to benefit global wheat-growing regions, analysts said.
A shift in Russian export policies also fuelled concerns that U.S. commercial grain companies will be left holding large supplies of wheat.
Corn and soybean futures followed wheat lower but were underpinned by strong demand, analysts said. Weak crude oil prices contributed to a negative tone for the markets.
The most-active wheat contract Wv1 on the Chicago Board of Trade settled down 16-3/4 cents at $5.72-3/4 a bushel and fell 4.4% for the week.
CBOT corn Cv1 settled down 2 cents at $4.04-3/4 a bushel, dropping 2.65% for the week.
CBOTsoybeans Sv1 lost 18-3/4 centsto $9.70 a bushel and fell 3.5% for the week.
The return of rain to parched wheat zones in southern Russia and the central United States have tempered concerns about dryness hampering plantings, though drought was still seen as a risk.
In Russia, the world’s biggest wheat supplier, grain exporters will sell directly to sovereign buyers, while non-Russian winners of international tenders will receive Russian grain only if they have long-term offtake agreements with Russian firms, the country’s Grain Exporters Union said.
The decision hit wheat futures, as well as share prices for grain traders such as Archer-Daniels-Midland ADM.N and Bunge Global BG.N, said Mike Zuzolo, president of Global Commodity Analytics.
Commercial grain companies fear they will be left holding large wheat supplies if Russia’s direct dealings with international buyers cut out other suppliers, he said.
“I have a serious concern about the international tender system as it relates to wheat now,” Zuzolo said.
For corn, demand for U.S. supplies from Mexico and other destinations has shifted attention away from the advancing U.S. harvest. Analysts said corn-export demand was fuelled by low prices for the U.S. crop.
Soybeans also received some support from demand at the Gulf of Mexico, said Susan Stroud, founding analyst at NoBullAg.com.
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