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Wheat climbs to 1-1/2-year high as world supplies tighten

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SINGAPORE — Chicago wheat rose for a third straight session on Wednesday with prices climbing to their highest since August 2018, underpinned by tightening global supplies and strong demand.

The U.S. soybean market dropped to its lowest in more than a month as traders anxiously awaited signs of Chinese buying.

“Wheat prices in the Black Sea are rising and the market is taking it as a sign of tighter global supplies,” said one Singapore-based trader.

The most-active wheat contract on the Chicago Board of Trade

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gained 0.2% to $5.82-3/4 a bushel by 0353 GMT, having risen earlier in the session to its highest since Aug. 7, 2018 at $5.83-3/4 a bushel.

Soybeans were up just a quarter of a cent at $9.16-1/4 a bushel, after dropping earlier in the day to $9.14-1/2 a bushel, the weakest since mid-December.

Corn rose 0.3% to $3.88-1/2 a bushel, having closed down half a percent in the previous session.

Rising prices in rival exporters, including Russia and Ukraine, combined with strong demand supported Chicago wheat futures.

French grain industry players warned of a severe impact on the cereal sector if ongoing strikes over pension reform that have disrupted the country’s rail services and port activities since last month were to last.

A month-old public transport strike that has crippled rail services and rolling stoppages by dock workers have left firms in the European Union’s biggest grain producer struggling to get their crop to ports and factories.

“The French strike is also supporting prices as buyers were expecting large volumes of wheat from France this year,” the Singapore-based trader said.

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For soybeans, the focus is on China which is by far the world’s biggest buyer of the oilseed.

The country has pledged to purchase $12.5 billion worth of U.S. agricultural goods in 2020 and at least $19.5 billion over the 2017 level of $24 billion in 2021.

Brazil’s soybean farmers have harvested only 1.8% of the soybean area so far this season, agribusiness consultancy AgRural said on Monday, reducing the ideal window for planting of the country’s second corn that is sowed after the oilseed is collected.

The U.S. Department of Agriculture said 1.2 million tonnes of U.S. soybeans were inspected for export last week, at the top end of analysts’ expectations for 600,000 to 1.2 million tonnes.

Weekly U.S. export inspections were 345,859 tonnes for corn, below analysts’ expectations for 450,000 to 800,000 tonnes, and 435,129 tonnes for wheat, towards the low-end of estimates of 400,000 to 600,000 tonnes.

Commodity funds were net sellers of CBOT corn, soybean, soymeal and soyoil futures contracts on Tuesday and net buyers of wheat futures, traders said. (Reporting by Naveen Thukral; Editing by Subhranshu Sahu)

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