Wheat inches higher on hopes China will ease COVID-19 measures


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WINNIPEG — Chicago wheat finished slightly higher on Tuesday after the previous day’s three-month low, as investors saw hope that China would ease measures to counter COVID-19 infections after rare protests in the country unsettled markets a day earlier.

Soybeans also gained on optimism about China, but corn dipped over concerns about export demand for U.S. supplies.

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Chicago Board of Trade wheat gained 3/4 cent to settle at $7.81-1/2 a bushel, holding above Monday’s low of $7.73-1/4.

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The most-active soybean contract gained 2-1/4 cents at $14.59-1/2 a bushel, after earlier touching its highest since Nov. 7. Corn shed 1-3/4 cents to settle at $6.69-1/2 a bushel.

“Wheat (selling) just got overdone, and there’s just a little bit of optimism now,” said Brian Basting, economist at Advance Trading, adding that investors were covering wheat short positions. “I don’t see anything fundamentally different.”

A senior Chinese health official said on Tuesday that public complaints about COVID-19 controls stem from overzealous implementation, fueling investor expectations that Beijing may ease restrictions that have prompted unusual public protests.

China is one of the world’s largest wheat importers and investors have been concerned that COVID cases and protests could slow its economic growth projections.

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Investors were reacting to “signs this morning from Chinese officialdom that a cautious easing will remain underway,” Saxo Bank said in a note.

“This has inspired a comeback in some commodities.”

Wheat has been pressured by investment funds’ short positions and cheaper supplies from Russia and elsewhere in the Black Sea region.

Purchases in recent days by importers including Egypt’s state buyer GASC and Turkey’s state grain board TMO have underlined competitive prices for Black Sea origins, despite disruption caused by Russia’s invasion of Ukraine.

The U.S. Department of Agriculture’s (USDA) office in Brazil has forecast the country will produce a record 126 million tonnes of corn in 2022/23. (Reporting by Rod Nickel in Winnipeg, Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by Richard Chang)



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