CANBERRA: Chicago wheat futures climbed higher on Friday after Canada’s production forecast was upgraded by a smaller margin than expected, although prices hovered near 33-month lows due to ample supply from Russia.
Corn and soybean futures edged higher.
“We’re exiting the key harvest period for the northern hemisphere and Russia is still exporting a fair bit,” said Dennis Voznesenski, an analyst at Rabobank in Sydney.
But prices are likely to rise towards the end of the year as focus moves to harvests in countries such as Argentina and Australia where dry weather has hit yields, reducing supply, Voznesenski said.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.4% at $5.96 a bushel by 0400 GMT, but flat over the week.
Prices touched $5.70 a bushel on Tuesday, the lowest since December 2020.
CBOT soybeans were up 0.4% at $13.66-1/2 a bushel and corn was 0.4% higher at $4.82-1/2 a bushel. Both were little changed from last Friday.
A Canadian government report on Thursday showed that local farmers will harvest 29.8 million metric tons of wheat, slightly more than previously expected but short of the average industry expectation of 30.4 million tons.
In Europe, meanwhile, consultants Strategie Grains cut their forecast for European Union soft wheat exports by 700,000 tons to 30.1 million metric tons this season, citing EU wheat was proving uncompetitive against Russian grain.
Cheap Russian wheat supply has dominated the market, pushing down prices despite expectations that global exportable stocks will approach historic lows by mid-2024.
Looking at weather conditions, a US government forecaster said there was a more than 95% chance that the El Nino weather pattern would continue through to March 2024, bringing more extreme conditions.
Dry weather brought by El Nino has lowered projected harvests in Southern Hemisphere exporters such as Australia and Argentina.
Argentina witnessed some respite, with recent rains in key agricultural areas lifting the share of planted wheat in “good or excellent” condition to around 24%, up 5.7% from a week earlier, the Buenos Aires grains exchange said.
The exchange forecast Argentina’s 2023/24 harvest at 16.5 million metric tons.
In soybeans, traders await an August crush report on Friday from the National Oilseed Processors Association (NOPA) for signs that higher processing could cut into stockpiles.
Commodity funds were net buyers of Chicago soybeans, soymeal and soyoil futures on Thursday and net sellers of wheat and corn, traders said.
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