Wednesday, 29 August 2012 11:01
SYDNEY: US wheat rose on Wednesday, gaining for the first time in six sessions, on concerns key producer Russia may curb exports of the drought-hit grain at an agricultural ministry meeting later this week.
Soybeans extended gains into a second session on export demand from China and corn edged up as damage to crop yields in the US Midwest from the worst drought in more than 50 years continued to underpin prices.
"There is a meeting of the Russian Agricultural Ministry on Friday, which is expected to bring about export limits, so there's a bit of positioning ahead of that," a Melbourne-based commodity trader said, referring to the rise in wheat prices.
A sharply reduced Russian 2012 grain crop forecast, which the government recently cut to 75 million tonnes, has sparked concerns Moscow might ban exports.
Russia barred grain exports for almost a year in August 2010 after a severe drought. This year Russia's wheat harvest may fall below the crop of 2010.
Chicago Board Of Trade December wheat rose 0.3 percent to $8.78-1/2 a bushel by 0402 GMT, after dropping 5 percent over the last five trading sessions.
New-crop soybeans rose 0.3 percent to $17.27-1/4 a bushel, having firmed 0.2 percent on Tuesday, while December corn rose 0.1 percent to $7.96-1/4 a bushel after falling 0.7 percent in the previous session.
Soybeans drew support from signs of export demand. Private exporters reported the sale of 110,000 tonnes of US soybeans to China for delivery in the new marketing year, the US Agriculture Department said on Tuesday.
Traders were also keeping a close watch on the impact of Hurricane Isaac, which surged ashore in southern Louisiana on Tuesday.
The expected torrential rainfall and localised flooding would add valuable soil moisture to a large chunk of drought-stricken cropland, but the initial impact will likely stall the early harvest of corn and soybeans and could lead to crop diseases, according to an agricultural meteorologist at the MDA EarthSat Weather.
The latest US Department of Agriculture harvest progress report, released at the end of trading on Monday, showed the corn harvest was 6 percent complete as of Aug. 26, up just 2 percentage points from a week earlier, and below analyst expectations for 10 percent.
The storm has already disrupted shipping.
Grain companies Cargill Inc and Archer Daniels Midland Co shut down some export elevators in Louisiana as a precaution.
Barge traffic along the Mississippi River between Baton Rouge, Louisiana, and the US Gulf has also been suspended. The river is a major channel for the movement of grains produced in the Midwest farm belt to export terminals at the Gulf of Mexico for shipment around the world.
Copyright Reuters, 2012