Wheat dips after rally, but Russian weather woes limit decline

SINGAPORE: Chicago wheat futures retreated on Wednesday from a strong jump in the previous session, although expectations of further weather-induced damage to the Russian crop provided a floor for prices.

Corn dipped, while soybeans edged higher in position-squaring ahead of monthly US supply-demand reports due later in the day.

“We are looking at much lower global wheat output,” said one trader in Australia.

“This is mainly due to crop losses in Russia.”

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.2% at $6.25 a bushel, as of 0242 GMT, after having climbed more than 3% on Tuesday.

Soybeans gained 0.1% at $11.79 a bushel, while corn gave up 0.1% to $4.49-1/4 a bushel.

Wheat prices rallied on Tuesday after the head of Russia’s grain union said frosts in Russia have affected between 15% and 30% of winter grains, varying by region, a much higher figure than suggested by the agriculture ministry.

Chicago wheat recovers from one-month low

In addition to Russian frost damage, a surprise drop in weekly US winter and spring wheat condition ratings underpinned prices. Top buyer Egypt booked 400,000 metric tons of Black Sea-origin wheat in an international tender.

Traders are squaring positions ahead of the US Department of Agriculture monthly (USDA) supply-demand reports due later in the day.

Analysts surveyed by Reuters on average expect the USDA to raise its forecasts of US 2023/24 and 2024/25 soybean ending stocks, and lower its forecasts for corn inventories. US corn and soybean crops are off to a strong start.

The USDA late Monday rated 74% of the US corn crop in “good-to-excellent” condition, down a point from last week, but still the highest for this time of year since 2020.

Soybeans were rated 72% “good-to-excellent” in the USDA’s first ratings of 2024 for the oilseed, in line with trade expectations.

Commodity funds were net buyers of CBOT wheat and soyoil futures contracts on Tuesday and net sellers of CBOT soybean, soymeal and corn futures, traders said.