SINGAPORE: Chicago wheat futures lost more ground on Monday, weighed down by expectations that a deal to export grain from war-torn Ukraine will be extended.
Soybeans slid for the first time in four sessions while corn eased, although losses in both markets were limited by forecasts of lower production in key supplier Argentina.
“Traders expect further losses out of Argentina due to recent weather and this might support near-term soymeal prices, but the market still faces record production from Brazil and a record soybean crop from the United States this summer,” commodity research company Hightower said in a note.
The most-active wheat contract on the Chicago Board of Trade (CBOT) gave up 0.7% to $7.03-3/4 a bushel as of 0323 GMT.
Soybeans fell 0.2% to $15.15-3/4 a bushel and corn gave up 0.2% to $6.38-1/4 a bushel.
Turkish Foreign Minister Mevlut Cavusoglu said on Sunday that Ankara is working hard to extend the UN-backed initiative that has enabled Ukraine to export grain from ports blockaded by Russia following its invasion.
Ukraine sees no need to limit wheat exports for the 2023/24 July-June season as the winter harvest looks to be larger than expected, albeit less than in peacetime, a top agriculture ministry official said.
Worries over lower output in Argentina following a severe drought have supported global soybean and corn prices.
A consortium of Argentine agricultural companies said on Friday they had slashed their forecasts for this season’s soybean and corn harvests due to the historic drought and mid-summer frosts that, they warned, could cost the country more than $20 billion.
French soft wheat crop rating unchanged
Traders were staking out positions ahead of the US Agriculture Department’s monthly World Agricultural Supply and Demand Estimates report that will be released on March 8.
Analysts had forecast reductions in US soybean supplies due to rising demand and a smaller harvest outlook for Argentina.
Meanwhile, China will aim to boost its grain production capacity by 50 million tonnes in 2023, Premier Li Keqiang said on Sunday, while also building storage centres in suburban areas for emergency supplies of daily necessities.
China is aiming to shore up its food security amid heightened geopolitical risks, which could threaten its heavy reliance on imports of animal feed grains like soybeans.