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U.S. grains: Wheat eases on ideas of Russian exports, long liquidation

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Grain storage at a Russian seaport. (Pridannikov/iStock/Getty Images)

Chicago | Reuters — U.S. wheat futures fell three per cent on Monday on expectations of a pickup in Russian wheat exports in the next few months as shippers try to get ahead of potential export curbs, traders said, while soybeans clung to modest advances.

Corn followed wheat lower.

Chicago Board of Trade December wheat settled down 17-1/4 cents at $5.62-1/2 per bushel and December corn ended down 2-1/4 cents at $3.76-1/2 (all figures US$).

New-crop November soybeans finished up 1/2 cent at $8.93-1/4 a bushel.

Wheat slipped on expectations that Russian exporters may step up grain shipments in the next few months in anticipation that the government could put curbs on exports sometime after December, traders said.

“Russia could be a very aggressive marketer in the next few months,” said Tom Fritz, a partner with Chicago-based EFG Group.

Speculation about potential export limits in Russia, the world’s top wheat exporter, had pushed futures sharply higher on Friday.

As CBOT wheat retreated on Monday, additional pressure stemmed from long liquidation after the U.S. Commodity Futures Trading Commission’s supplemental commitments report showed large speculators expanded their net long position in CBOT wheat to 14,220 lots, the biggest since 2012.

“That long (position) in wheat was at the top end of the range. I think that was a concern, that we are getting bloated,” said Don Roose, president of U.S. Commodities.

CBOT corn followed wheat lower, pressured by expectations for a bumper U.S. harvest. Participants in the annual Pro Farmer Midwest Crop Tour began scouting fields on Monday in South Dakota and Ohio.

Weekend rains and forecasts for more showers this week bolstered yield prospects.

“These rains should significantly boost soil moisture levels, favouring corn and soybean filling,” Radiant Solutions said in a daily client note.

However, after the CBOT close, the U.S. Department of Agriculture lowered its condition ratings for corn and soy. USDA rated 68 per cent of the corn crop as good to excellent, down from 70 per cent a week earlier, and rated 65 per cent of soybeans as good to excellent, down from 66 per cent previously.

Analysts on average had expected the government to lower its corn rating by one percentage point and leave soybean ratings unchanged.

CBOT soybean futures closed fractionally higher, supported by optimism that upcoming talks between Washington and Beijing might defuse trade tensions and help revive U.S. soy shipments to the world’s biggest importer of the oilseed.

After last week’s announcement of a fresh round of U.S.-China trade negotiations in late August, a Wall Street Journal report late on Friday said the world’s two largest economies were working on a plan to resolve their tariff dispute by November.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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