Wheat and corn jump two percent

US wheat and corn surged on Wednesday due to buying and short-covering fuelled by rumours that Russia and Argentina planned to curb exports. Soyabean futures also rallied, notching a two-week high. Argentina said it had no plans to limit exports, while Russia said it was not planning a tariff, but wheat futures at the Chicago Board of Trade still rose to a near two-week high and corn to the highest in one week.
Severe drought has hit Argentina, the world's No 2 corn exporter after the United States. Officials in Russia, the No 3 wheat exporter, hinted late last year that export curbs were likely if grain sales topped 24-25 million tonnes. Corn, soyabeans and wheat each reversed course after being down overnight and in early Chicago trading, as cash markets were strong and as the dollar eased from session highs.
Wheat and corn posted their fourth straight day of gains following talk that Russia would impose a tax on its wheat exports to ensure sufficient supplies at home. A spokesman for Russia's Agriculture Ministry said he had no knowledge of any plans to consider wheat export tariffs at the government level. Any curb by Russia could shift demand to the United States, the world's top wheat exporter, which faces stiff competition from Black Sea region suppliers such as Russia.
Larry Glenn, analyst and broker for Frontier Ag, said the Russia rumours rallied wheat, which bucked a lower trend in overnight trading, on "the idea that a little bit of business might get put over to us (United States)". Noncommercial investors, which include hedge funds, hold the largest net short position on record in CBOT wheat futures of 93,135 contracts, according to data released on Friday by the US Commodity Futures Trading Commission.
Large short positions generally make markets more vulnerable to big swings in prices. Analysts said wheat futures at the Chicago Board of Trade were also supported by an inflow of investment fund money. CBOT wheat for March delivery finished 13-3/4 cents higher at $6.33-1/2 per bushel, a gain of 2.2 percent, while CBOT March corn settled 1.65 percent or 10-1/4 cents higher at $6.30-1/4. CBOT March soyabeans rose 2-1/2 cents to $12.20.