Chicago wheat prices edge up, set for monthly gain

10/30/2020 | 05:52am

* Stronger-than-expected U.S. sales aids wheat prices

* Weakness in global equities keeps lid on market

* Corn supported by strong demand from Mexico

LONDON, Oct 30 (Reuters) - Chicago wheat futures edged higher on Friday, boosted by strong demand, although global economic concerns linked to rising COVID-19 infections helped to limit gains.

The most-active wheat contract on the Chicago Board Of Trade (CBOT) was up 0.1% at $6.04-1/4 a bushel at 1044 GMT and on track for a fourth consecutive monthly gain.

The market has lost some upward momentum, however, after rising to a near 6-year peak of $6.38-1/4 last week on concerns over dryness in key Northern Hemisphere producing regions.

Much-needed rain in some areas has prompted a sell-off during the last few days.

"It could be argued that bullish sentiments towards the 2021 (wheat) crop still remains, although traders are also becoming more concerned over a potential fall in industrial, food, and feed demand due to the renewed escalation in the global Covid-19 epidemic," Jonathan Lane, head of grain trading at ADM Agriculture Ltd, said in a note.

The U.S. Department of Agriculture (USDA) said weekly U.S. wheat export sales totalled 803,200 tonnes, topping market forecasts for 200,000 tonnes to 700,000 tonnes.

December milling wheat on Paris-based Euronext was down 0.2% at 204.50 euros a tonne.

Corn prices were slightly weaker with the most active CBOT contract down 0.5% at $3.96-1/2 a bushel but remained on track for a third consecutive monthly gain.

Mexican buyers booked deals to buy their largest volume of corn from the United States since last December, the USDA said Thursday, a development that could point to growing import demand from its southern neighbour.

"Demand has been pretty strong across the board for soybeans, corn and wheat," said one Singapore-based grains trader. "Importers who had missed out on the rally are buying on expectations of a further increase in prices."

The most active CBOT soybean contract was up 0.5% at $10.55-1/2 a bushel and was on track for a fifth consecutive monthly gain. (Additional reporting by Naveen Thukral in Singapore; Editing by Amy Caren Daniel and Kim Coghill)

© Reuters 2020
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