By Mark Weinraub
CHICAGO, Sept 4 – U.S. wheat futures dropped 3.3 percent on Tuesday to a one-week low after Russia’s agriculture ministry said it had no plans to restrict grain exports, dampening speculation about possible curbs to shipments from the world’s biggest wheat supplier, traders said.
Soybeans edged higher, following gains in soymeal as investors shrugging off concerns over a swine flu outbreak in China reducing demand for animal feed as well as ongoing worries about a tariff dispute between Washington and Beijing.
Corn firmed on support from bargain buying after weakening during overnight trading.
Russia’s agriculture ministry does not see a need to impose export duty or curb grain exports in any other way, it said in a statement after a meeting with exporters on Monday.
The news had pushed European futures lower on Monday, and the reopening of U.S. markets on Tuesday after Monday’s Labor Day holiday added to selling momentum.
A firm dollar, which added to the likelihood that the United States will remain the global supplier of last resort, further pressured the wheat market. The gains in the dollar stemmed from worries over emerging markets and the U.S.-China trade standoff.
Dollar strength makes U.S. supplies of wheat relatively more expensive to overseas buyers.
“We won’t get big, consistent (export) business until the rest of the world is definitely out of wheat,” said Mark Schultz, chief analyst at Minnesota-based Northstar Commodity Investment Co.
At 11:56 a.m. CDT (1656 GMT), Chicago Board of Trade December soft red winter wheat futures were down 17 cents at $5.28-1/2 a bushel.
A sharp expected fall in Russian wheat production and fast exports at the start of the season have fuelled speculation that the world’s top wheat supplier would limit flows.
“Russia had a record crop last year and this year the crop is not record-sized but is still decent; that is why Russian wheat is still one of the cheapest in the world,” said an India-based agricultural commodities analyst.
The news from Russia overshadowed developments in Argentina, where growers and consultants said farmers may delay wheat sales and plant less corn this year after the government announced a roughly 10 percent export tax on the grains as part of an austerity program.
CBOT November soybeans were up 1 cent at $8.44-1/2 a bushel. CBOT December corn was 1-1/2 cents higher at $3.66-1/2 a bushel.
Gains in both corn and soybeans were limited by expectations of a bumper U.S. harvest in the coming weeks. (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore, editing by Ed Osmond and James Dalgleish)