NEW DELHI: Weaker demand for exports weighed on Chicago wheat on Thursday, but concerns over unfavourable weather conditions hitting the crop in some of the world’s top producers limited losses.
Soybean rose due to an uptick in short-term demand. In the global wheat market, traders await the outcome of United Nations-Russia negotiations to extend and expand a July 22 deal that resumed Ukraine’s Black Sea grain and fertilizer exports. The deal is set to expire next month.
“The wheat trade is keenly waiting to hear what the negotiators have to say,” said a Singapore-based trader who did not wish to be named, in line with their company policy.
“At the moment it is difficult to get a clear idea about the outcome of the negotiations as the Russia-Ukraine war has just intensified.”
The most-active wheat futures on the Chicago Board of Trade (CBOT) dropped 0.3% to $8.38-1/2 a bushel, as of 0407 GMT, while corn fell 0.1% at $6.77-1/2 a bushel.
Soybeans gained 0.09% to $13.73-3/4 a bushel. Wheat traders are also weighing risks such as droughts in the Argentine and US wheat belts, heavy rains in some areas of Australia, and a slow start to planting in Ukraine.
After a late frost hit the wheat crop already damaged by drought, Argentina’s Rosario grains exchange has cut its 2022/23 wheat harvest forecast to 15 million tonnes from the 16 million tonnes estimated last week.
Wheat output in Russia, the world’s bigger exporter of the grain, is expected to drop to 84.8 million tonnes from a record 100.6 million tonnes in 2022, according to Russia-focused consultancy Sovecon.
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Heavy rains, relatively low domestic prices of wheat and a strong rouble are expected to cut Russia’s winter grain sowing substantially this autumn.
Also, Russia’s farm ministry has proposed the country’s grain export quota at 25.5 million tonnes for the period from mid-February to end-June.
The size of the quota is equal to the one proposed by Russia’s Union of Grain Exporters earlier in October.
In the middle of mostly favourable weather, soybean traders are monitoring the advancing US harvests.
But there are some concerns over long-term demand from buyers. Commodity funds were net sellers of CBOT corn and wheat futures contracts and net even in soybean and soymeal futures on Wednesday.
They were net buyers of soyoil contracts.
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