Wheat eases on supply prospects; China COVID woes cap soybean gains

KUALA LUMPUR: Chicago wheat prices edged down on Wednesday, hit by prospects of more supplies from the European Union (EU), while a surge in COVID-19 cases in China limited gains on soybeans.

French wheat sales to China and talk of Polish or German wheat being booked in the United States are creating an unexpected wave of demand for EU supplies after exports had been curbed by Russian competition in recent weeks, traders said.

“Ideas that some European wheat ‘pencils in’ to being exported to the U.S East Coast helped to pressure the market,” Hightower said in a report.

Talks of a record crop from Russia helped to add to the bearish tone, it added.

The most-active wheat contract on the Chicago Board of Trade (CBOT) slipped 0.25% to $8.08-1/2 a bushel.

Soybeans rose 0.14% to $14.31-3/4 a bushel, and corn rose 0.04% at $6.59-1/2 a bushel.

Soybean futures are still holding a risk premium for potential weather problems in Brazil and Argentina, which have been plagued by dry conditions, Hightower said.

EU wheat mixed with exports in focus

Rising COVID-19 cases in China deepened worries about the economy and dimming hopes for a quick reopening, raising concerns that it could also dent the country’s commodities demand, especially for soybeans.

Corn futures saw pressure from wheat and a lack of fresh news.

Brazil’s National Association of Grain Exporters said on Tuesday the country’s corn exports could jump exponentially next year if farmers harvest a full crop and Chinese demand is strong.

The US Department of Agriculture (USDA) on Monday rated 32% of the US winter wheat crop in good to excellent condition, unchanged from the previous week - the lowest for this time of the year in USDA records dating to 1986.

Workers at the largest US rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could cause significant damage to the US economy and strand vital shipments of food and fuel.

The market will be closed on Thursday for a public holiday.