January 15, 2020 / 3:46 AM / a month ago

GRAINS-Wheat up for 2nd session, near 1-1/2 year high as supplies tighten

    * Tightening supplies buoy wheat futures to near 1-1/2 year
high
    * Russia plans to limit grain exports in Jan-June period
    * Soybean, corn futures eye U.S.-China phase 1 trade deal 

 (Adds details, quote in paragraphs 4 & 5)
    By Naveen Thukral
    SINGAPORE, Jan 15 (Reuters) - Chicago wheat futures edged
higher on Wednesday, gaining for a second day and trading near a
1-1/2 year high, with potential export curbs by Russia
underpinning prices.
    Soybeans eased, although losses were limited, as the market
awaited signing of a U.S.-China Phase 1 trade deal later in the
day that could reopen China's giant market to U.S. grain and
farm product exports.
    The most-active wheat contract on the Chicago Board of Trade
(CBOT) added 0.4% to $5.70-1/2 a bushel by 0309 GMT. On
Tuesday, the market climbed to its highest since Aug. 20, 2018
at $5.73 a bushel.
    Soybeans were down 0.1% at $9.41-3/4 a bushel, while
corn was flat at $3.89 a bushel.
    "More signs of tighter supply are emerging," said Tobin
Gorey, director of agricultural strategy, 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 tonnes in January-June, it
said in a statement on Tuesday, adding the quota would be
scrapped later in the most active part of season for trading.

    This could result in higher demand for U.S. wheat, which has
struggled to win business.
    Egypt's main state wheat buyer purchased 240,000 tonnes of
Russian and Romanian wheat in an international purchasing
tender. Prices including cost and freight (C&F) ranged from
$248.85 to $249.90 per tonne, up about $3 to $4 from an Egyptian
wheat tender on Jan. 8.
    U.S. and Chinese officials are set to sign a Phase 1 trade
deal that may allow the two sides to begin resolving their trade
dispute, which led to cuts in exports of U.S. soybeans, corn and
other farm products to China.
    Despite the deal, U.S. exporters face tough competition from
a huge soybean harvest in Brazil in early 2020 following recent
good weather.
    Commodity traders and analysts are struggling to map out how
China will reach the eye-popping amounts it is committing to buy
from the U.S. under the trade deal.
    Argentina's soybean and corn crops are in still in the
earlier growth stages and the crop-growing regions ended 2019 on
the driest note in several years, Karen Braun, a market analyst
for Reuters, wrote in a column. 
    But recent rainfall has been helpful and the temperature
outlook in the Pacific Ocean has grown more supportive of good
Argentine harvests, she added.
    
 Grains prices at 0309 GMT
 Contract    Last    Change  Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  570.50  2.00    +0.35%   +1.06%       544.48  75
 CBOT corn   389.00  0.00    +0.00%   +0.84%       384.23  62
 CBOT soy    941.75  -0.50   -0.05%   -0.45%       928.18  46
 CBOT rice   13.37   $0.01   +0.07%   +0.26%       $12.98  61
 WTI crude   58.09   -$0.14  -0.24%   +0.02%       $60.09  
 Currencies                                                
 Euro/dlr    $1.113  $0.000  +0.00%   -0.05%               
 USD/AUD     0.6896  0.000   -0.06%   -0.10%               
 
 
 
    

 (Reporting by Naveen Thukral; Editing by Anil D'Silva and
Shailesh Kuber)
  
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