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Wheat steadies on hopes China will ease COVID-19 measures

11/29/2022 | 01:18pm EST

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Hopes China will ease COVID-19 rules boost financial markets

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Corn slips on export demand concerns, soybeans ease

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Wheat consolidates after slide on fund selling, slow exports

WINNIPEG, Manitoba, Nov 29 (Reuters) - Chicago wheat traded steady on Tuesday after the previous day's three-month low, as investors saw hope that China will ease measures to counter COVID-19 infections after rare protests in the country unsettled markets a day earlier.

Corn and soybeans dipped as traders weighed mixed weather conditions for South America's crops.

Chicago Board of Trade wheat inched up half a cent to $7.81-1/4 a bushel at 12:02 p.m. CST (6:02 p.m. GMT) holding above Monday's low of $7.73-1/4.

Corn was down 0.3% at $6.69-1/2 a bushel, with traders noting concerns about weak export demand for U.S. supplies. The most-active soybean contract was down 0.2% at $14.54-1/4 a bushel, after earlier touching its highest since Nov. 7.

"Wheat (selling) just got overdone, and there's just a little bit of optimism now," said Brian Basting, economist at Advance Trading, adding that investors were covering wheat short positions. "I don't see anything fundamentally different."

A senior Chinese health official said on Tuesday that public complaints about COVID-19 controls stem from overzealous implementation, fuelling investor expectations that Beijing may ease restrictions that have prompted unusual public protests.

China is one of the world's largest wheat importers and investors have been concerned that COVID cases and protests could slow its economic growth projections.

Investors were reacting to "signs this morning from Chinese officialdom that a cautious easing will remain underway," Saxo Bank said in a note.

"This has inspired a comeback in some commodities."

Wheat has been pressured by investment funds' short positions and cheaper supplies from Russia and elsewhere in the Black Sea region.

Purchases in recent days by importers including Egypt’s state buyer GASC and Turkey's state grain board TMO have underlined competitive prices for Black Sea origins, despite disruption caused by Russia's invasion of Ukraine.

The U.S. Department of Agriculture's (USDA) office in Brazil has forecast the country will produce a record 126 million tonnes of corn in 2022/23.


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
CORN FUTURES (ZC) - CBE (ELECTRONIC)/C1 0.67% 678.5 End-of-day quote.-0.66%
CORN?FUTURES (SETTLEMENT ONLY) (ZC) - CBR (FLOOR)/C11 0.00%End-of-day quote.0.00%
EURO / BRAZILIAN REAL (EUR/BRL) 0.83% 5.6141 Delayed Quote.-1.59%
S&P GSCI CORN INDEX -0.15% 558.2249 Real-time Quote.0.04%
S&P GSCI SOY BEANS INDEX 0.34% 604.0093 Real-time Quote.-0.27%
SOYBEAN MEAL FUTURES (ZM) - CBE (ELECTRONIC)/C1 0.06% 481.7 End-of-day quote.0.61%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 1.37% 72.985 Delayed Quote.0.15%
US DOLLAR / TURKISH LIRA (USD/TRY) 0.04% 18.83159 Delayed Quote.0.73%
WHEAT FUTURES (ZW) - CBE (ELECTRONIC)/C1 2.03% 765 End-of-day quote.-5.33%
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