Wheat Weakened By Profit-Taking As Russian Export Tax Announced
U.S. wheat fell on Monday on profit-taking after Russia announced it will tax wheat exports to cool domestic prices.
Corn and soybeans rose on concern about unfavourable crop weather in South America.
The Chicago Board of Trade's most active wheat fell 1.0% to $6.08-1/4 a bushel at 1143 GMT. Wheat earlier on Monday hit $6.22 a bushel, its highest since Nov. 25.
Soybeans rose 0.8% to $11.70-1/4 a bushel. Corn rose 0.3% to $4.25 a bushel.
Major wheat exporter Russia plans to impose an export tax of 25 euros ($30.4) a tonne on wheat exports between Feb. 15 and June 30, the economy minister said on Monday. This is part of measures to stabilise domestic food prices.
Chicago wheat rose sharply on Friday and again earlier on Monday on expectations the Russian tax is likely to increase global demand for the U.S. and other supplies to replace Russian wheat.
“Wheat is down on selling pressure, with profit-taking today despite the news of the Russian export tax,” said Matt Ammermann, StoneX commodity risk manager. “It seems to be something of a classic example of buy the rumour and sell the fact, with profit-taking after wheat reached three-week highs.
“There had been speculation about Russian export restrictions after President Vladimir Putin's criticism of rising food prices last week," Ammermann added.
"The tax looks high enough to trouble export sales. Now the reaction of Russian farmers will be awaited, markets will want to see if Russian farmers sell or hold onto their wheat.”
Unfavourable crop weather in South America was also in focus.
“Soybeans and corn are seeing support from continued concern about dry South American weather, especially in Argentina and parts of Brazil which could hit export supplies if crop estimates are reduced,” Ammermann said.
Markets are also hoping for signs of more Chinese buying in the U.S. this week after a quiet period. U.S. corn is still looking competitive in world markets with more export sales possible, he added.