CEREALS-Wheat prolongs fall, soybeans firm on export demand

Band Christopher Walljasper

CHICAGO, May 20 (Reuters)Chicago wheat fell for the third day on Friday, pulling back from a two-month high hit earlier this week as technical selling pressured the market, traders said.

Corn also slowed as accelerated plantings in the United States and news that Argentina may raise an export volume cap weighed.

Soybeans advanced on strong export demand amid tight supplies.

Chicago Board of Trade (CBOT) most active wheat contract Wv1 fell 21-1/4 cents to $11.79-1/4 a bushel at 10:52 a.m. (3:52 p.m. GMT). For the week, wheat was on course to finish near parity.

CBOT corn CV1 fell 5-1/2 to $7.77-3/4 a bushel, heading for a weekly decline of 0.4%, its third consecutive week of declines.

Soy Sv1 added 11-1/2 cents to $17.02 a bushel, targeting a 3.3% weekly gain.

World wheat supplies continue to face climatic challenges. In the United States, an annual field trip to Kansas this week revealed the lowest yield potential in the best winter wheat state since 2018.

“Traders got really nervous up there, especially hedge funds,” said Arlan Suderman, chief commodities economist at StoneX. “US exports are essentially out of the market.”

Global export constraints could ease as India plans to allow traders to ship wheat sitting in ports after a sudden export ban prevented traders from loading shipments.

The United Nations is trying to broker a deal to allow Ukrainian grain to be shipped from Black Sea ports that have been closed since Russia invaded in February, which, coupled with a bumper Russian harvest, could also alleviate a possible shortage of wheat.

Soybeans continue to be supported by strong export demand amid tight US old crop stocks.

“When you look around the world at other oilseed replacements, beans are still relatively cheap,” said Mark Schultz, chief analyst at Northstar Commodity. “There’s still pretty good demand.”

Oilseed markets were digesting the latest policy announcement from Indonesia’s biggest palm oil producer, which said it would reinstate the requirement to allocate a certain volume to the domestic market as it lifts a recent export embargo.

(Reporting by Christopher Walljasper; additional reporting by Gus Trompiz in Paris and Hallie Gu and Dominique Patton; Editing by Kirsten Donovan)

((Christopher.Walljasper@thomsonreuters.com; 1 630 269 3072; Reuters Messaging: christopher.walljasper.thomsonreuters.com@reuters.net))

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