March 20, 2020 / 3:34 PM / 20 days ago

GRAINS-U.S. wheat, soybean and corn futures rise on export demand

(Recasts with new analyst quote, details, export deals, changes byline/dateline; pvs PARIS/SINGAPORE)

By Mark Weinraub

CHICAGO, March 20 (Reuters) - Chicago Board of Trade corn, soybean and wheat futures rose on Friday, supported by a pick-up in overseas demand for U.S. commodities, traders said.

CBOT soft red winter wheat futures were on track for their fourth straight day of gains and hit their highest since Feb. 24. Wheat has risen 7.4% this week, which would be its biggest weekly gain since May, as demand for pasta and bread was expected to rise due to the coronavirus pandemic.

“Wheat has got sort of an interesting relationship with the coronavirus,” said Ted Seifried, chief market strategist for Zaner Ag Hedge. “During the run on the grocery stores, a lot of people forgot about being gluten free.”

At 10:18 a.m. CDT (1618 GMT), CBOT May soft red winter wheat futures were up 8 cents at $5.43 a bushel. CBOT May corn was up 2 cents at $3.47-1/2 a bushel and CBOT May soybeans were up 15-3/4 cents at $8.59 a bushel.

Chinese importers signed deals to buy U.S. corn and wheat in their first round of major purchases since Washington and Beijing signed a Phase 1 trade deal in January, the U.S. Agriculture Department said.

USDA also said that unknown buyers booked deals for 110,000 tonnes of U.S. soybeans. On Thursday, two trade sources with knowledge of the deal said that exporters sold soybeans to China.

The 756,000-tonne corn sale, announced on Friday morning, was China’s biggest purchase of U.S. corn since July 2013. But corn futures retreated from their overnight highs after the crude oil market turned lower.

The weakness in crude oil threatened to decimate the ethanol industry and pushed corn futures to their lowest since September 2016 earlier this week on questions about demand.

Many U.S. ethanol plants have slashed production over the past week or idled entirely as the coronavirus outbreak cut into fuel consumption and cratered margins to refine the corn-based fuel, the head of a biofuel trade group said on Thursday.

The soybean market was monitoring developments in Argentina, where a key port town said on Thursday it would suspend port activities as part of efforts to contain the spread of the coronavirus.

Argentina is the world’s largest exporter of soyoil and soymeal, and worries about supply disruption in South America fueled a rally in Chinese soymeal futures to their highest in almost five months on Friday. (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Aditya Soni, Kirsten Donovan and Tom Brown)

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