GRAINS-Wheat hits 6-month high on rising world prices; corn, soy decline

Julie Ingwersen

(Recasts; updates prices, adds quotes, changes byline, previous dateline HAMBURG) CHICAGO, Jan 14 (Reuters) - U.S. wheat futures hit a six-month high on Tuesday, supported by a pickup in export business and news that Russia, the world's top wheat exporter, is considering limiting grain exports through June, traders said. Corn and soybean futures drifted lower as brokers awaited the signing of the Phase 1 trade deal which could reopen China's giant market to U.S. grain and farm product exports. As of 1:08 p.m. CST (1908 GMT), Chicago Board of Trade March wheat was up 5-1/4 cents at $5.67-1/2 per bushel after reaching $5.73, the contract's highest since June 28. CBOT March corn was down 1 cent at $3.88-1/2 a bushel and March soybeans were down 2 cents at $9.40-1/4. Wheat rose on news that Russia's agriculture ministry is looking to set a non-tariff quota for grain exports of 20 million tonnes in January-June. The agriculture ministry's draft, which has yet to be reviewed by the government, sees the quota at 20 million tonnes of grain, which Russia can export without damaging domestic market in Jan. 1-June 30, 2020, the ministry said. Meanwhile, Egypt's main state wheat buyer purchased 240,000 tonnes of Russian and Romanian wheat in an international purchasing tender. Prices including cost and freight (C&F) ranged from $248.85 to $249.90 per tonne, up about $3 to $4 from an Egyptian wheat tender on Jan. 8. "It's the Russian story, where they are talking about export quotas," said Tom Fritz, partner with EFG Group in Chicago, said of Tuesday's strength in CBOT wheat futures. "It seems like there is a lot of wheat business around right now. The Egyptians continue to pay up," Fritz said. "World wheat prices are going up, so we have to follow suit." Corn and soybean futures languished ahead of Wednesday, when U.S. and Chinese officials are expected to sign a Phase 1 trade deal. The pact may allow the two sides to start resolving their trade war which led to a massive cut in exports of U.S. soybeans, corn and other farm products to China. Reports say China has agreed to hugely increase U.S. food and farm product imports, but the text of the proposed agreement has not been released, leaving markets uncertain. "Markets are drifting today until we see the actual signing of the Phase 1 trade deal between the U.S. and China and crucially the actual details of the deal as we still know almost nothing," said Matt Ammermann, commodity risk manager with INTL FCStone. Even if China's market is reopened to American soybeans, U.S. exporters face tough competition from a huge soybean harvest in Brazil in early 2020 following recent good weather.

CBOT prices as of 1:07 p.m. CST (1907 GMT):

Net Pct Volume

Last change change

CBOT wheat WH0 568.00 5.75 1.0 57273CBOT corn CH0 388.50 -1.00 -0.3 91439CBOT soybeans SH0 940.50 -1.75 -0.2 72143CBOT soymeal SMH0 301.20 -2.60 -0.9 54941CBOT soyoil BOH0 34.01 0.06 0.2 60980

NOTE: CBOT March wheat, corn and soybeans shown in cents per bushel, March soymeal in dollars per short ton and soyoil in cents per pound.

(Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by Ed Osmond and Richard Chang)