Wheat steadies after slide as market waits on supply and trade news
PARIS/SINGAPORE: Chicago wheat prices edged higher on Monday, steadying after hitting a six-week low before the weekend, as grain markets sought fresh direction from US government crop forecasts due this week and developments in a trade tussle between Washington and Beijing.
Soybeans also ticked higher but the market remained capped by the prospect of bumper US harvest yields and the continuing tensions between the United States and top soybean importer China.
Corn was marginally lower as investors focused on Wednesday's US Department of Agriculture (USDA) crop report, which will update US corn and soybean harvest projections while giving a revised outlook for world supply and demand.
The Chicago Board Of Trade's most-active wheat contract was 0.4 percent higher at $5.13-1/4 a bushel by 1054 GMT.
On Friday the contract had touched its lowest since late July at $5.07-1/2 as investment funds trimmed long positions in wheat and modest US exports dampened hopes that reduced Russian supply would shift demand.
This week's USDA report will be watched for revisions to world wheat supply and demand, notably in Russia and Australia.
"Operators will be reluctant to take a position before Wednesday's USDA report," consultancy Agritel said in a note.
"In Australia, there is a clear contrast between the west, which registers a good level of rainfall, and the east, which is suffering from a lingering water deficit," it said of wheat.
The wheat market has rallied in recent weeks as weather-hit harvests in Europe and Russia, along with drought in eastern Australia, threaten to tighten exportable supply.
News of a giant barley purchase by Saudi Arabia, which booked 1.5 million tonnes in a tender, may also suggest that the importer expects rising prices and tightening grain supplies, traders said.
However, US wheat exports have been moderate.
"US wheat exports are still struggling. We are not seeing higher demand for US wheat," said Phin Ziebell, an agribusiness economist with National Australia Bank.
"Prices are unlikely to rally unless we see buyers turning to the United States for wheat."
CBOT soybeans were up 0.3 percent at $8.46-1/2 a bushel while corn eased 0.2 percent to $3.66-1/4 a bushel.
Analysts expect the USDA to raise its forecast for soybean production and trim its corn production outlook, though the latter would remain huge.
US President Donald Trump warned he has tariffs ready to go on $267 billion worth of Chinese imports in addition to the $200 billion of its goods already facing further duties.
China imported 9.15 million tonnes of soybeans in August, up 14 percent from July, customs data showed on Saturday, with buyers continuing to sweep up Brazilian supplies after Beijing imposed tariffs on US shipments.