PARIS/SINGAPORE: US and European wheat futures hit three-week highs on Tuesday as technical momentum and fresh doubts about supply from the Black Sea region sustained a market rally.
US soybeans rose for a fourth consecutive session, buoyed by strong demand that is expected to be confirmed by monthly US crushing data due later in the day.
Corn tracked wheat and soybeans higher and also found background support from rising oil prices and an easing dollar.
Chicago Board Of Trade March wheat rose 1.7 percent to $ 5.42/1/4 a bushel by 1258 GMT, just below the session high of $ 5.42-1/4, its highest since Jan. 22.
The contract closed up 2.3 percent on Friday ahead of a three-day market closure due to Monday’s US Presidents Day holiday. In Europe, March wheat on Euronext added as much as 1 percent to touch its highest its almost three weeks at 190.75 euros a tonne.
The impact of a Russian export duty has raised expectations of demand being shifted to European Union origins and also to US wheat that has seen sluggish exports so far this season.
“Following yesterday’s public holiday in the US, wheat prices this morning are continuing the upswing they began on Friday, boosted by reports that the export duty levied by Russia since February caused exports to collapse by 97 percent week-on-week to 19,000 tons in the most recent reporting week,” Commerzbank analysts said in a note.
Exporters and analysts, however, say Russia still needs to ship a significant amount of wheat before the end of the marketing year in June to fulfil previously agreed contracts Some traders said the wheat rally was driven more by investment funds buying to cut short positions.
Bitterly cold weather in the US Midwest has created background concerns about US winter wheat crops, and the Commodity Weather Group said in a note on Tuesday there could be scattered frost damage in part of the Midwest later this week where snow cover is lacking.
CBOT March soybeans added 0.8 percent to $ 9.98-3/4 a bushel, having firmed 0.7 percent on Friday, and March corn gained 0.8 percent to $ 3.90-1/2.
US soybean crushings were expected to come in at 162.673 million bushels in the National Oilseed Processors Association’s monthly report set for release on Tuesday, according to the average estimate in a Reuters poll.