Chicago | Reuters –– U.S. wheat futures rallied on Wednesday, with the front-month K.C. hard red winter wheat contract jumping to its highest in 7-1/2 years, on concerns about tightening global supplies and strong export demand.
Corn futures also rose, with the most-active contract surging 2.6 per cent in its biggest daily percentage gain in four months.
Soybean futures rose for the second day in a row on follow-through buying after the U.S. Agriculture Department’s cut to the harvest outlook sparked a rally on Tuesday.
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Wheat’s rise stemmed from hopes that U.S. exporters will pick up some business as other suppliers tighten their grip on stocks.
Top wheat exporter Russia may change the way it calculates grain export taxes in case of price hikes, Agriculture Minister Dmitry Patrushev said. Russia also plans to set export quotas for the first half of 2022.
“Wheat has a story this year, and that story is that the Russians are hell-bent on destroying their leading presence as a wheat exporter to the world,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.
The benchmark Chicago Board of Trade December wheat futures ended up 24-1/2 cents at $8.03 a bushel (all figures US$). K.C. December hard red winter wheat gained 24 cents at $8.17-1/2, topping out at $8.19-1/2, the highest for the front-month contract since May 13, 2014.
CBOT January soybeans were up 4-3/4 cents at $12.16-3/4 a bushel.
The soy market hit the 11-month low before the U.S. Department of Agriculture on Tuesday issued a lower-than-expected U.S. soybean crop estimate in a monthly crop report.
The market is readjusting to the “notion of smaller rather than larger 21/22 U.S. supplies,” said Rich Feltes, head of market insights for RJ O’Brien.
CBOT December corn rose 13-1/2 cents to $5.69-1/4 a bushel.
— Reporting for Reuters by Tom Polansek and Mark Weinraub in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.
