Wheat climbs

US wheat futures climbed to a three-week high on Wednesday, their fifth straight session of gains, on growing prospects that the United States could gain export business if shipments are curbed in Russia. US wheat is currently priced competitively with supplies from Russia and many traders expect wheat importers to look to the United States for wheat if, as expected, Russia curbs exports or imposes protection duties.
Wheat futures for March delivery settled 1.2 percent higher, bolstered by the rumblings in the export market, while basis bids for soft red winter wheat shipped from the US Gulf Coast also increased. Corn futures gained on ideas that fewer wheat exports could lead to more interest in the competing animal feed of corn while soyabean futures were narrowly lower following rains in parched Argentina.
The dollar eased at midday, underpinning grains and other commodities, after the US Federal Reserve announced it would not raise interest rates until at least late 2014. Gold rose sharply and copper hit a fourth-month peak after the news. Chicago Board of Trade March wheat finished 7-3/4 cents higher at $6.41-1/4 per bushel while CBOT March corn rose 4-1/4 cents to $6.34-1/2 per bushel and CBOT March soyabeans down 6-1/2 cents at $12.13-1/2.
Russia, projected to be the No 3 wheat exporter, in 2011 said it would export no more than 23 to 25 million tonnes of grain in the current marketing year. Exports through mid-January surged to a record 19.5 million tonnes, seven months since Russia lifted a nearly year-long export ban after drought reduced crops in 2010.
Many traders and analysts now expect Russia to impose protection duties in April, when shipments are likely to hit the threshold of 23-25 million tonnes. "Russia will probably be enacting an export curb between now and April, and that's what the market is keying in on," Allendale Inc analyst Rich Nelson said. Russia and other countries in the Black Sea region have dominated wheat exports this marketing year, taking away wheat and corn export business from the United States. "If there were any export restrictions by these countries this would increase demand for US wheat, corn and soyabeans on global markets," Rabobank analyst Nick Higgins said.