CHICAGO: Chicago Board of Trade wheat futures rebounded from a four-week low on Friday, bolstered by a weaker US dollar and as traders assessed reports of more attacks in the Black Sea export zone while turning their attention to US jobs and crop data.
Corn futures ended steady on a choppy day of trading, as news of fresh export demand and weakness in the US dollar helped keep a floor under prices, though the most-active contract ended the week lower for a second straight week. Meanwhile, soybeans dipped lower, as the bullish tone faded from news of a run of Chinese purchases of US supplies that had helped support prices earlier in the session, market analysts said.
China has bought at least 10 more cargoes of US soybeans, traders said on Thursday, the latest in a flurry of purchases ahead of President Xi Jinping’s expected US visit next month. The deals follow trade talks between Washington and Beijing that, according to the White House, included Chinese commitments to buy 25 million metric tons of US soybeans annually and boost purchases of other American farm goods.
China has bought about 6 million tons so far for delivery in the US crop year that starts on September 1, a US industry source said. Meanwhile, shipping traffic through the Strait of Hormuz has dwindled to 33 vessels from Monday to Thursday this week, data showed, versus 50 in the week-ago period, as markets watched talks between Iran and Oman for signs of progress in reopening the key waterway. And investors were spending part of the day adjusting positions ahead of next week’s key government crop reports.
The US Department of Agriculture is set to release its monthly crop supply and demand report on August 12, and will also update its yield, production and harvest acreage numbers for corn and soybeans. “What we’re seeing is filling in the back-and-forth trade ahead of the USDA reports,” said Sherman Newlin, senior market strategist with Zaner Ag Hedge. The most-active CBOT corn contract ended unchanged at USD4.62 a bushel, while soybeans settled down 1-1/2 cents at USD11.76-1/4 per bushel.
CBOT most-active wheat contract ended 8-1/2 cents higher at USD6.39-3/4 per bushel. Traders have been weighing disruption to shipments from Russia and Ukraine against large global supply, including in the Black Sea region, and slow demand from importers.
“The grain is there,” said Commonwealth Bank analyst Dennis Voznesenski. “The big question now is whether they can get it out. That’s the determining factor of whether we see prices go up or down.” On Thursday, the governor of Ukraine’s Odesa Region said a Russian attack had damaged a foreign-flagged ship loaded with wheat, killing one crew member and causing a fire.
On Friday, traders said there was more unconfirmed talk of drone attacks at Russia’s Black Sea port of Novorossiysk that may have damaged vessels.
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