Wheat slips further from 10-mth high after rain forecast for parts of Russia

CANBERRA: Chicago wheat futures on Thursday fell further from 10-month highs, as traders assessed whether forecast rain in parts of Russia would halt a rapid decline in harvest estimates for the world’s top exporter.

Soybean and corn futures were little changed after dipping on Wednesday following a US Department of Agriculture report showing speedy planting progress in the US Midwest.

Weighing on all three contracts was a stronger dollar, which made US farm goods more expensive for importers with other currencies.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.2% at $6.84-1/2 a bushel by 0426 GMT.

Prices surged to $7.20 on Tuesday, the highest since July, after Russian analysts cut their harvest estimates by around 10 million metric tons due to dryness and spring frosts.

Expectations of a smaller crop in Ukraine also added to concerns about Black Sea supply.

But weather charts suggest that rain this week should reach parts of southern Russia and Ukraine, though high temperatures could reduce its benefit to crops.

“Prices are certainly overdone to the upside,” said Ole Houe, director of advisory services at IKON Commodities in Sydney.

CBOT wheat is unlikely to fall significantly in the near term due to uncertainty about Black Sea supply, but should dip from July as northern hemisphere harvests pump grain into the market, he said.

Chicago wheat retreats from 10-month high

Also supporting prices are expectations that India could soon begin wheat imports after a six-year gap to replenish depleted reserves and hold down prices, as sources told Reuters could happen.

In other crops, CBOT soybeans were up 0.1% at $12.14-3/4 a bushel and corn was 0.1% higher at $4.55-1/2 a bushel.

A USDA weekly report showed US corn and soybean planting was slightly ahead of the average pace of the past five years, at 83% and 68% complete, respectively.

Argentinian farmers are meanwhile speeding up badly delayed sales of soybeans, government data show, helped by higher global prices and better weather conditions for the ongoing harvest.

Traders said commodity funds were net sellers of CBOT wheat, corn and soybeans on Wednesday, having sharply reduced their short positions in all three contracts in recent weeks.