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Wheat gains 1.3% to highest since 2014 on world supplies concerns

10/18/2020 | 11:31pm EST

* Wheat gains more ground, climbs to highest in six years

* Dry weather in U.S., Black Sea regions raises supply worries

* Corn prices rebound on expectations of strong demand

SINGAPORE, Oct 19 (Reuters) - Chicago wheat futures climbed more than 1% on Monday to their highest in almost six years as dry weather in the world's leading exporting regions raised worries about supplies for 2021.

Corn gained ground, rising for four of five sessions with prices supported by expectations of strong demand for U.S. supplies, while soybeans slid for a second session.

"Weather forecasters have made no changes to their dry outlook for very dry winter wheat regions in the U.S. and east of the Black Sea," said Tobin Gorey, director of agricultural strategy at, Commonwealth Bank of Australia.

"That weather context supports current price levels. The rally has another potential phase but that is likely to require the market make substantial cuts to U.S., Ukraine and Russia crop forecasts."

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1.3% at $6.33-1/4 a bushel by 0301 GMT, near the session high of $6.35 a bushel, the highest since December 2014.

Soybeans slid 0.1% to $10.49-1/4 a bushel, having closed down 1.2% on Friday. Corn added 0.6% to $4.04-1/2 a bushel after ending 0.4% lower in the previous session.

In China, Dalian corn prices jumped 1.4% to an all-time high as lower production and strong demand continued to buoy the market.

Wheat was drawing support from concerns over production in Argentina, the U.S. Plains and the Black Sea region.

Argentina's 2020/21 wheat crop is estimated at 17 million tonnes, the Rosario grains exchange said in its monthly crop report last week, citing dryness and frosts as reasons for cutting its previous 18 million tonne estimate.

The U.S. Department of Agriculture, in its daily reporting system for export sales, said shippers struck deals to sell a total of 391,150 tonnes of U.S. soybeans to unknown destinations. Exporters separately sold 128,000 tonnes of U.S. corn to Mexico.

Brazil will suspend tariffs on corn and soy imports from countries outside the Mercosur trade bloc until early next year to help reduce food prices that are pushing up inflation, the economy ministry said on Saturday.

The move could further tighten global supplies as Brazil is the world's biggest exporter of soybeans and a key supplier of corn.

Ukraine has harvested 45.7 million tonnes of grain from 12.06 million hectares, or 78% of the sown area, Ukraine's economy ministry said on Friday.

It said farmers had collected 10.0 million tonnes of corn from 2.2 million hectares, or 40% of fields planted with this crop.

Large speculators raised their net long position in CBOT corn futures in the week to Oct. 13, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, raised their net long position in CBOT wheat and cut their net long position in soybeans.

"Speculators have been flirting with record optimism in Chicago-traded soybeans for a couple of weeks, though they finally broke their bean-buying streak last week as futures hit 2-1/2-year highs," Karen Braun, a market analyst for Reuters, wrote in a column.

"However, investors' bullish corn run is still alive." (Reporting by Naveen Thukral; Editing by Aditya Soni)

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
COMMONWEALTH BANK OF AUSTRALIA -0.19% 80.1 End-of-day quote.0.25%
CORN FUTURES (C) - CBR (FLOOR)/C1 1.02% 419 End-of-day quote.6.96%
EURO / BRAZILIAN REAL (EUR/BRL) 0.07% 6.3242 End-of-day quote.39.98%
SOYBEAN MEAL FUTURES (ZM) - CBE (ELECTRONIC)/C1 -0.99% 389.6 End-of-day quote.31.08%
WHEAT FUTURES (W) - CBR (FLOOR)/C1 2.21% 578 End-of-day quote.1.21%
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