Wheat prices fall on Russia's export move, Chinese data

Wheat prices saw further losses on Wednesday, extending a setback triggered by news that Russia was lifting its export ban, while bearish Chinese economic data also weighed on the whole commodity complex.
"It (the decline in wheat) is mostly due to the Russian ban being cancelled but the (supply) situation remains tight, especially in Europe," said fund manager Romain Lathiere of Diapason Commodities Management.
July wheat on the Chicago Board of Trade was off 1.2 percent at $7.73 a bushel at 1150 GMT. The contract lost 4.6 percent of its value on Tuesday after Prime Minister Vladimir Putin said over the weekend that Russia will lift a grain export ban from July 1.
Dealers said wheat prices remained underpinned by diminished crop prospects in western Europe, particularly France, following a prolonged spell of dry weather.
Jonathan Barratt, managing director of Commodity Broking Services, also noted US spring wheat planting were also significantly behind schedule and the relief offered by the lifting of the Russian export ban might be temporary.
"The Russian decision has provided some temporary relief from supply constraints. Remember though, Russia has predicted some very high yields the same thing happened last year and then it all fell apart.
"We are not sure they have the subsoil moisture to carry the harvest," he said.
November milling wheat in Paris fell 1.4 percent to 234.50 euros a tonne.
Corn and soybean prices registered more modest losses.
"All commodities are quite weak today as we did not have really good PMI figures for China. Energy is down, grains are down, the LME (base metals) is down," Lathiere said. China's official purchasing managers' index (PMI) hit a nine-month low in May, a survey showed on Wednesday, while the final HSBC Purchasing Managers Index released later in the day also showed growth in the Chinese manufacturing sector slowed to a 10-month low.
CBOT July corn fell 0.2 percent to $7.45-3/4 a bushel while July soybeans eased 0.1 percent to $13.74-1/2.
Dealers said planting delays were underpinning prices. The US Department of Agriculture's weekly crop progress report showed that farmers had planted 86 percent of their anticipated corn acreage as of May 29, up just 7 percentage points from a week earlier and 3 points below expectations.
The five-year average for corn planted by late May is 95 percent. "We know we are going to be tight (on grain supplies) and the situation seems to be worst on corn. It is a good time to buy grains right now," Diapason's Lathiere said.