Markets

U.S. wheat, soy hits high

SINGAPORE : U.S. wheat rose on Friday, on track for a second day of gains, helped by doubts that exports from the Bla

Published June 3, 2011 Updated June 3, 2011 12:42pm

3 min

By Muhammad Iqbal

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Soybeans touched new two-month high amid concerns over U.S. plantings and strong demand, while corn was little changed after rising 1 percent in the last session.

Investors in the wheat market are still unclear about the volume of grains coming from the Black Sea region after talk of export tariffs in Russia and moves by Ukraine to cut its export estimates.

"It is probably Russia, which is now talking about putting tariffs on exports to keep control over domestic prices," said Paul Deane, agricultural commodity strategist at ANZ.

"Certainly it is not looking like a free fall as Russia is going to keep a lid on exports one way or the other through export taxes."

Chicago Board of Trade July wheat rose 0.52 percent to $7.73-3/4 a bushel by 1114 GMT and soybeans for July delivery.

Rose 0.43 percent to $14.13 a bushel after hitting a fresh two-month high at $14.17-1/2 in earlier trade, Still, wheat is down about 5.6 percent so far this week as a result of heavy losses suffered on Tuesday and Wednesday. July corn eased 0.36 percent to $7.64 a bushel.

In Europe, wheat futures edged higher with support from weather problems in Europe and North America and doubts over how swiftly Russia will return to export markets.

But a quiet market lacked clear direction with many operators taking a long weekend after a public holiday in several European countries on Thursday.

By 1122 GMT benchmark November milling wheat on the Euronext exchanges up 1.00 euros or 0.42 percent at 238.50 euros ($344.1) a tonne.

Russia should consider introducing export limits on grain linked to domestic prices through a system of floating import duties, according to its central bank governor and an industry lobby.

There has been a sharp rise in domestic prices since plans to lift the export ban were announced on Saturday. Prices for fourth grade milling wheat in Russia's southern exporting region have jumped by $25-$35 to $220.70.

And Ukraine may export 15 to 18 million tonnes of grain in the 2011/12 season, Agriculture Minister Mykola Prysyazhnyuk said on Thursday, a figure that is lower than earlier official forecasts. The ministry has until now projected grain exports at 19 to 20 million tonnes.

Ukraine said on Friday its grain exports are no longer subject to any restrictions.

Wheat crops are facing bad weather across key producing regions of the world. Spring wheat areas in the northern U.S. Plains and Canadian Prairies remain very wet, which has delayed plantings and was likely to reduce final seedings this year. Analytical firm Informal Economics on Thursday trimmed its

2011 U.S. winter wheat forecast to 1.421 billion bushels, which would be the smallest crop in five years. Informal also cut its EU wheat crop outlook by 5.4 million tonnes and its Canadian wheat crop forecast by 500,000 tonnes.

Soybean prices have firmed as planting delays in the U.S. Midwest pushed the market higher amid strong demand from the bio diesel sector.

The U.S. Census Bureau said Thursday that bio diesel producers consumed an estimated 216.8 million lbs of soy oil in April, up 23 percent from March.

Relentless rain throughout the U.S. corn belt this spring, particularly in eastern areas, delayed seeding of corn by more than a month in some locations. Some farmers are switching to soybeans, which can be sown later than corn, and some are likely to scrap seedings altogether and collect insurance.

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