CANBERRA: Chicago wheat futures dipped on Tuesday as export prices in major supplier Russia fell further, although a decline in the size of shipments from the country cemented expectations that supply will tighten in the coming months.
Corn and soybean prices also dipped amid rising supply from the ongoing U.S. harvest and record crops in top exporter Brazil.
Abundant cheap grain flowing from Russia is keeping prices low and a significant change will be needed for the market to shift, said Andrew Whitelaw at Australian agricultural consultancy Episode 3.
“All that matters is what is happening in the Black Sea,” he said.
Wheat, corn, soy up on concern
The most-active Chicago Board of Trade (CBOT) wheat futures were down 1.1% at $5.66-3/4 a bushel by 0418 GMT, near last month’s three-year low of $5.40.
CBOT corn fell 0.4% to $4.86-1/2 a bushel and soybeans were 0.5% lower at $12.57-3/4 a bushel.
Agricultural consultancy IKAR raised its forecasts for Russia’s grain crop this year to 141.2 million metric tonnes from 140.0 million and lifted its estimate for Russian grain exports to 64.5 million tonnes in the 2023/24 season from 64.0 million.
IKAR also said Russian wheat export prices continued to decline last week, with 12.5%-protein wheat for free-on-board (FOB) delivery in early November down $5 to $230 a ton.
But analysts say Russian wheat exports in October will fall considerably due to weak demand from major importers and informal government restrictions.
The Sovecon agriculture consultancy estimated Russian wheat exports in October at 3.9-4.4 million tons, down from 5 million in September and 4.5 million in October last year.
IKAR meanwhile forecast wheat exports in October at 4.5 million tons, down from 5.4 million last month and 4.7 million in October 2022.
Elsewhere, the European Union’s crop monitoring service said Kazakhstan will harvest 12.3 million metric tons of wheat this year, down 25% from a bumper 2022 crop, after growing belts endured harsh weather.
Meanwhile, a top United Nations trade official met with Russian officials in Moscow for talks aimed at enabling “unimpeded access” to global markets for grain and fertiliser from Russia and Ukraine, a U.N. spokesperson said.
Exports from Ukraine have shrunk as Russia attacks its port infrastructure.
Moving to other crops, the U.S. Department of Agriculture will on Thursday release a monthly grain supply and demand report, with analysts expecting small downgrades to U.S. corn and soybean harvest estimates.
Commodity brokerage StoneX, however, raised its estimate of U.S. 2023 corn production to 15.282 billion bushels from 15.102 billion and lifted its forecast for U.S. soybean production to 4.175 billion bushels from 4.144 billion.
CBOT corn is up around 4% from a 33-month low of $4.67-3/4 last month and soybeans are near their lowest since December 2021.
Commodity funds were net sellers of Chicago soyoil, corn and soybean futures and net buyers of wheat and soymeal futures on Monday, traders said.
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