WINNIPEG, Manitoba, Nov 27 (Reuters) – Chicago wheat rose more than 1 percent on Wednesday, resuming a rally that has been buoyed by strong export prospects.
Corn followed wheat higher, but soybeans surrendered earlier gains, weighed down by profit-taking and weakness in soymeal.
A major new wheat purchase from Egypt, the world’s top importer, underlined robust global demand, as its buying agency bought 60,000 tonnes of French wheat.
“I think it just sent out a message that the U.S. is competitive and global prices are indeed coming up a little bit,” said Tom Fritz, a partner at EFG Group in Chicago.
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Part of U.S. wheat’s competitiveness in world markets is linked to recent weakness in the dollar, said J. Mark Kinoff, president of Ceres Hedge in Chicago. The greenback was up slightly on Wednesday.
Chicago Board Of Trade front-month December wheat rose 1.2 percent, or 7-3/4 cents, to $6.54-1/4 a bushel at 11:06 a.m. CST (1706 GMT), on course for its fourth gain in five sessions after falling on Tuesday.
The market was also digesting several other developments that pointed to robust global wheat demand.
Libya’s agriculture minister told Reuters on Wednesday that while it has sufficient wheat stocks, it will resume imports soon to meet domestic needs.
China’s Xinhua News Agency reported earlier in the day that China sold a larger percentage of the reserve wheat it had available at auction and at a higher average price from the previous week.
Major Australian wheat customer Indonesia said it was looking elsewhere for food imports because of a diplomatic rift with Australia, while harvest problems in Australia and Argentina have also brightened U.S. export prospects.
December corn added 0.2 percent, or 3/4 cent, to $4.19-1/4 per bushel, pulled up in sympathy with wheat and bargain buying after sliding 1.5 percent on Tuesday.
January soybeans shed 1/2 cent to $13.28-3/4 a bushel after touching their highest level since Sept. 19.
Investors took profits on soybeans after they finished higher in three of the previous four sessions, traders said.
The rally was fueled by a surge in the December soymeal contract and strong demand from China. But soymeal turned weaker as some investors trimmed long positions ahead of Thursday’s U.S. Thanksgiving holiday and Friday’s first notice day for deliveries against the December soymeal contract, Fritz said.
U.S. exporters reported the sale of 235,000 tonnes of U.S. soybeans to unknown destinations, the U.S. Department of Agriculture said on Wednesday, marking the fourth straight business day that it has reported large individual U.S. soybean sales.
