Chicago corn futures were little changed on Wednesday after sliding almost 3 percent in the previous session while US and European wheat futures rose as a Russian export ban sparked more Middle East import demand. The wheat market recovered following its biggest decline in more than a week on Tuesday, with Russian harvest problems remaining in focus and big wheat importer Egypt returning to the market with a new purchase tender.
CBOT wheat for September delivery was up 0.3 percent at $6.76-3/4 a bushel at 1126 GMT. "Overall the problems with the Russian harvest still provide a bullish atmosphere with Egypt back in the market yet again with a big purchase tender," one European trader said.
Grains futures surged to two-year highs in early August, almost doubling from June lows, as a drought devastated Russia's harvest and the country announced a sudden grain export ban. Egypt, the world's largest wheat importer and hit hard by the Russian ban, was tendering for 55,000 to 60,000 tonnes of wheat on Wednesday.
"In the previous week alone, Egypt had bought 295,000 tonnes in two tenders so it seems the impact of the Russian export stop is still unfolding," a European trader said. "We also have no clear picture yet about whether Russia will be a grain importer."
Paris benchmark November milling wheat was up 3.00 euros or 1.4 percent at 216.75 euros at 1126 GMT after briefly testing resistance at 217.75, with support also coming from Egypt's tender and the Russian problems.
French traders said the recent return of rain to Russia had not yet fully benefited the main grain production centres in the southern regions. Russian weather forecasters said on Wednesday that some rain was falling but the damaging heatwave continued. Russia's Agriculture Ministry said the volume of wheat harvested by August 25 was 31 percent down on the year.
Ukraine's government said it did not expect to impose grain export restrictions while a major analyst revised its Ukrainian crop forecast down. French traders expect that the Russian harvest problems could force Ukraine to reassess its position. "All this remains extremely bullish," a European trader said. Corn prices stabilised on hopes higher meat prices and ethanol blending margins could limit losses from downward pressure as the harvest of a near-record US crop gets underway.
"Margins in producing ethanol are now profitable, given the decline in corn prices," said Garry Booth, a trader at MF Global Australia. "And there was a sharp rally in the animal products division - pork, hogs and cattle prices have moved sharply higher and of course it helps feed ingredients such as corn and soyameal." Chicago Board of Trade September corn was unchanged at $4.05-1/4 a bushel at and September soyabeans were also little changed, up 0.18 percent to $10.01-1/4 a bushel after dropping below $10 a bushel for the first time in three weeks on Tuesday.
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