PARIS/SINGAPORE: Chicago wheat futures rose for a second session on Monday, supported by a lower-than-expected official forecast of US supply next season and doubts over the renewal of a deal on the shipping corridor from Ukraine before a deadline this week.
Corn and soybeans edged higher as markets recovered from losses on Friday triggered by bigger-than-anticipated US supply projections from the US Department of Agriculture (USDA).
In closely watched supply and demand forecasts for 2023/24, the USDA said wheat harvest in the drought-stricken Plains would be the smallest since 1957.
Wheat futures rise after falling for four consecutive sessions
That would bring US wheat supplies to their lowest in 16 years, below the average expectation of analysts polled before the USDA’s World Agricultural Supply and Demand Estimates (WASDE).
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 2.2% by 1224 GMT at $6.49-1/4 a bushel.
K.C. wheat futures, which trade the hard red winter variety worst affected by drought, again led gains. The most active contract was up 2.7% at $9.00-3/4 after touching a three-month high.
“The WASDE was somewhat bullish for wheat prices given the large drop expected in US ending stocks for 2023/24,” ING Economics said in a note.
“However, developments related to the Black Sea grain deal will also be crucial for price direction.”
An Ukrainian official said on Monday no additional talks are planned this week to extend the Black Sea grain corridor deal that expires on May 18. Market reaction was muted as traders awaited a clearer announcement on the deal.
Russia has threatened to quit the agreement, citing obstacles to its grain and fertilizer exports. Talks last Thursday over U.N. proposals to extend the deal ended without agreement.
The most active CBOT corn contract added 0.9% to $5.91-1/2 a bushel. Soybeans were up 1.0% at $14.04 a bushel, supported by strength in soymeal.
US corn and soybean supplies were expected to rise sharply in the coming year due to forecasts for a record harvest for both crops, the USDA said in Friday’s report.
However, harvests will be dependent on US Midwest weather in the coming months, with some growing belts already dry.
In China, the authorities are significantly increasing the rate of inspections on imported soybean cargoes, traders told Reuters on Friday.
Comments
Comments are closed.