GRAINS-US wheat futures rocket higher on private sales to China

Credit: REUTERS/KARL PLUME

By Brendan O'Brien

CHICAGO, Dec 4 (Reuters) - Chicago Board of Trade wheat rose nearly 3% on Monday, with the most-active contract Wv1 reaching the highest level since late August after the U.S. Department of Agriculture confirmed the largest one-off private sale to China in years.

Corn ended narrowly mixed, supported by a favorable export inspection report by the U.S. government, while soybeans declined, hitting a one-month low.

CBOT March wheat WH24 settled up 17-3/4 cents at $6.20-1/2 per bushel after rising to $6.26-1/2, the contract's highest since Oct. 20 and the highest on a continuous chart of the most-active contract Wv1 since Aug. 28.

Wheat surged after the U.S. Department of Agriculture (USDA) confirmed private sales of 440,000 metric tons of U.S. soft red winter wheat to China, marking the Asian country's largest purchase of U.S. wheat since at least 2020.

"I think the fact that China's coming in for U.S. soft red wheat and not picking it up on the Black Sea would suggest that we are finally starting to see some stable prices," said Mike Zuzolo, president of Global Commodity Analytics.

Meanwhile, CBOT January soybeans SF24 ended down 18-3/4 cents or 1.4% at $13.06-1/4 per bushel, the contract's lowest since Oct. 31. Analysts continued to monitor weather conditions in drought-stricken Brazil, where the forecast of rain is helping ease concern about crop losses in the world's largest soy supplier.

"We'll know a lot more here between now and the middle of December; that is crunch time for South American production in terms of irreversible potential losses," Zuzolo said.

Actively traded March corn CH24 settled 3/4 cent higher at $4.85-1/2 a bushel but stayed inside of Friday's trading range.

Corn drew support from USDA's weekly export inspections report, which showed more than 1.2 million metric tons of the yellow grain were inspected for export in the latest week, well above trade expectations for 350,000 to 900,000 tons.

Export inspections of U.S. wheat and soybeans fell below expectations.

(Additional reporting by Michael Hogan in Hamburg and Mei Mei Chu in Beiijng; Editing by Alex Richardson and Marguerita Choy)

((brendan.obrien@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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