Soybean gained more ground although prices were capped by slowing consumption in China, the world’s biggest importer, amid a Washington-Beijing trade war.
The most-active wheat contract on the Chicago Board of Trade gained 1.5 percent at $5.12-3/4 a bushel by 0301 GMT, after rising earlier in the session to its highest level since Oct. 19 at $5.15 a bushel.
Soybeans added 0.6 percent at $8.50-1/4 a bushel and corn was up 0.8 percent at $3.70-1/2 a bushel.
Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), bought 470,000 tonnes of wheat, including one 60,000-tonne cargo of U.S. wheat along with 350,000 tonnes of Russian wheat and 60,000 tonnes of Ukrainian origin.
Egypt’s GASC had not bought U.S. wheat at a tender since May 2017.
“The rally’s catalyst was Egypt buying U.S. wheat – a highly unusual occurrence,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
“Many, ourselves included, were expecting to see U.S. wheat exports rise and rundown U.S. inventory during season 2018. Export sales reports had so far provided little support for this prediction.”
There was additional support for the wheat market stemming from a deep reduction in Australia production forecast.
The Australian Bureau of Agricultural and Resource Economics cut its 2018-19 wheat forecast to about 16.6 million tonnes, down from its September estimate of 19.1 million.
Some Asian flour mills are looking to lock in wheat supplies until well into the middle of 2019, potentially shaking off a years-long trend for hand-to-mouth buying as global output is set to drop for the first time in six years.
Soybean prices are likely to face pressure as China reduces consumption.
New standards of protein content in animal feed that China announced on Friday will cut the country’s annual soymeal consumption by 11 million tonnes and soybeans by 14 million tonnes, according to a statement from the agricultural ministry seen on Sunday.
Large speculators increased their net short position in CBOT corn futures in the week to Oct. 23, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and increased their net short position in soybeans.
