February 21, 2020 / 4:38 AM / 3 months ago

GRAINS-Wheat set for biggest weekly gain in nearly 3 months

* Lower Australian output, talk of Chinese buying supports wheat

* Soybeans largely unchanged this week, China virus caps gains (Adds details, quote in paragraph)

By Naveen Thukral

SINGAPORE, Feb 21 (Reuters) - Chicago wheat futures rose on Friday, with the market set for the biggest weekly gain in almost three months with lower production in Australia raising concerns about world supplies.

Soybeans were on track to finish the week mostly unchanged as expectations of lower Chinese demand weighed on the market.

“There is support wheat prices as Australia earlier this week said its production was lower than the previous forecast,” said Darin Friedrichs, senior Asia commodities analyst at brokerage INTL FCStone.

“And there has been market talk that China is going to buy U.S. wheat.”

The most-active wheat contract on the Chicago Board Of Trade gained 3.2% so far this week, set for the biggest weekly gain since late November, after Australia said its output fell to a 12-year low. The market was up 0.1% at $5.60 a bushel, as of 0409 GMT.

Corn was set to post small gains for the week, after losing 1.5% last week.

Prospects of China ramping up agricultural purchases from the United States under the interim trade deal have been clouded by the coronavirus epidemic.

China reported an uptick in new cases of coronavirus on Friday although the rise in infections remained at its slowest pace since January, a downward trend which the World Health Organization has called encouraging.

Mainland China had 889 new confirmed cases of coronavirus infections as of Feb. 20, the National Health Commission said, up from 394 cases a day earlier. The death toll rose by 118 to 2,236, mostly in the Hubei provincial capital of Wuhan, which remains under virtual lockdown.

The U.S. Agriculture Department (USDA) on Thursday forecast 2020 U.S. corn plantings at 94.0 million acres, up from 89.7 million acres in 2019. Analysts had expected the USDA to peg 2020 corn plantings at 93.6 million acres.

There was additional pressure on soybeans stemming from expectations of a record harvest in Brazil that will boost competition in the export market.

In Argentina, recent rains have improved soil moisture in three key soy-growing provinces, setting the stage for a possible future increase in this season’s crop estimate, the Buenos Aires Grains Exchange said on Thursday.

Commodity funds were net sellers of Chicago Board of Trade corn, soybean, wheat, soyoil and soymeal contracts on Thursday, traders said. (Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips)

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