SINGAPORE: Chicago wheat futures lost more ground on Thursday, as an extension of a deal to allow war-ravaged Ukraine to continue exporting grains eased concerns over world supplies.
Corn slid to trade near an 18-month low hit in the previous session after China cancelled purchases of US cargoes and as favourable weather helped newly planted crops in the Midwest.
“The agreement keeps open a major trade route amid Russia’s war in Ukraine,” commodities research firm Hightower said in a report. “The news was seen as bearish.”
The most-active wheat contract of the Chicago Board of Trade (CBOT) slid 0.4% to $6.23 a bushel, as of 0324 GMT, extending losses for a third session. Corn fell 0.1% to $5.60-3/4 a bushel, while soybeans added 0.2% to $13.39-1/2 a bushel.
The Ukraine Black Sea grain deal has been extended for two more months, in what UN Secretary-General Antonio Guterres hailed as “good news for the world,” a day before Russia could have quit the pact over obstacles to its grain and fertilizer exports.
However, losses in the wheat market were limited by expectations of lower winter output in the United States.
Crop scouts on the second day of an annual three-day tour of Kansas projected an average yield for hard red winter wheat in the southwestern portion of the state at 27.5 bushels per acre, the worst since at least 2003 and down from 37 bushels per acre last year.
The Wheat Quality Council tour’s five-year average for the same area from 2017-2022 was 44.68 bushels per acre.
No tour was held in 2020 due to the COVID-19 pandemic. Corn futures faced pressure after the US Department of Agriculture said private exporters cancelled purchases of 272,000 tonnes of old-crop US corn earmarked for China, the fourth such cancellation in the last month.
CBOT wheat may test support at $6.35
Meanwhile, the 2023 US corn and soybean crops are off to a solid start, with a faster-than-average planting pace and mostly crop-friendly weather pointing towards rising supplies.
Commodity funds were net sellers of CBOT wheat, soybean, corn, soyoil and soymeal futures contracts on Wednesday, traders said.
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