Chicago wheat futures rose about 1 percent on Tuesday as a decline in U.S. crop ratings and news of radioactive pollution in the Ural mountains triggered a round of short-covering and concern about wheat exports from Russia, the world's top supplier
Chicago wheat futures rose about 1 percent on Tuesday as a decline in U.S. crop ratings and news of radioactive pollution in the Ural mountains triggered a round of short-covering and concern about wheat exports from Russia, the world’s top supplier. Corn and soybean futures were little changed in choppy trade. As of 12:31 p.m. CST (1831 GMT), Chicago Board of Trade December wheat was up 4 cents at $4.26 per bushel after reaching $4.28-3/4, its highest in a week. CBOT December corn was steady at $3.45 a bushel after reaching $3.45-3/4, its highest since Nov. 9. January soybeans were down 1 cent at $9.89 a bushel. Wheat firmed after Russia’s meteorological service said it had measured pollution of a radioactive isotope at nearly 1,000 times normal levels in the Ural mountains. That marked the first official Russian data supporting reports that a nuclear incident had taken place in Russia or Kazakhstan in the last week of September. Neither Russia nor Kazakhstan has acknowledged any accident.
“That is still not seen to be high enough to create human or environmental risks, but traders holding large short positions are reducing their risk exposure a bit today,” INTL FCStone chief commodities economist Arlan Suderman said in a note to clients. The Russian news reminded some traders of the Chernobyl nuclear disaster of 1986, which sparked a rally in CBOT grain futures. But many were skeptical about the market impact of the contamination, and attributed strength in wheat to technical buying. “This isn’t Chernobyl. Everybody wants it to be something bigger than it is,” said one Chicago-based trader. Russia is the world’s biggest wheat exporter, and its farmers just completed the harvest of a record-large crop.
Wheat also drew support from the U.S. Department of Agriculture’s weekly crop conditions report late Monday. The government rated 52 percent of the winter wheat crop in good to excellent condition, down from 54 percent the previous week, despite analyst expectations for no change. CBOT corn was nearly flat after pushing to a 1-1/2-week high. The USDA late Monday said the U.S. corn harvest was 90 percent complete, behind the five-year average of 95 percent, while the soybean harvest was 96 percent done, near the five-year average of 97 percent. “The U.S. corn and soybean harvests are approaching their end very rapidly now as the USDA said on Monday and there do not seem to be too many problems being faced,” said Graydon Chong, senior commodity analyst with Rabobank. “This is a weakening factor today with large U.S. supplies coming onto the world market.” “But the downside for corn is limited by the large short position held by investment funds in corn,” Chong said.