Export premiums for soft red winter wheat shipped from the US Gulf Coast were steady to lower on Tuesday as sharply higher futures prices helped to expand the competitive disadvantage of the grain variety in world markets, traders said. Chicago Board of Trade wheat futures neared the life-of-contract lows notched earlier this month, before surging nearly 2 percent on a short-covering rally.

Demand already was slow, with US wheat more expensive than Black Sea and South American wheat, while many traders were on holiday. Premiums of SRW wheat were seen about 5 cents per bushel for shipments in January through the summer harvest, the traders said. Premiums for corn and soybeans were nominally steady in limited dealings during the slow period between last week's Christmas holiday and Friday's New Year's Day holiday. US corn was as much as $10 per tonne more expensive than Argentine and Brazilian corn, while global buyers expected cheaper Brazilian soybean offerings as the harvest in early 2016 approaches.

Rising floodwaters on US Midwest rivers all but halted barge traffic, boosting prices in the CIF barge market and limiting the flow of fresh supplies to the Gulf. The higher CIF prices also prevented traders from discounting free-on-board grain offers further in efforts to drum up export demand.

Copyright Reuters, 2016