Wheat claws back some ground even as Black Sea supply pressures prices

CANBERRA: Chicago wheat futures edged higher on Wednesday after France’s farm ministry again downgraded the country’s crop, but sizeable exports of cheap Black Sea wheat continued to stifle a rally that drove prices to three-month highs last week.

Wheat slips from 3-month highs over supply fears

Soybean futures edged higher as traders monitored heat and dryness in Brazil that threaten soybean seeding in the world’s top soy exporter. Corn also gained.

Fundamentals

• The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.2% at $5.77 a bushel, as of 0022 GMT, while CBOT corn inched 0.1% higher to $4.12-3/4 a bushel and soybeans climbed 0.2% to $10.08-1/4 a bushel.

• Plentiful supply pushed all three contracts to four-year lows in recent weeks, but prices have regained some ground. Wheat rallied as high as $5.99 on Friday, its highest since June 19.

• Fuelling wheat’s gains were crop losses in Europe, a soft US dollar, dry conditions in Ukraine and Russia and a missile attack last week on a grain vessel in the Black Sea that Kyiv blamed on Moscow.

• France’s farm ministry on Tuesday again lowered its estimate of the country’s 2024 soft wheat output, with the harvest expected to be the worst since 1986.

• Soft wheat exports from the European Union since the start of the 2024/25 season in July are also sharply lower than at the same stage last year.

• Ukraine’s agriculture ministry said on Tuesday the pace of winter wheat planting was much slower than last year after record high temperatures and a lack of rain.

• However, exports from Russia, the biggest wheat exporter, are expected to remain strong in September, though down from a record high in August, consultancy Sovecon estimated.

• Sovecon also slightly raised its estimate for Russia’s 2024 wheat crop to 82.9 million metric tons.

• In other crops, the rapidly advancing US soy and corn harvests are putting pressure on prices by attracting massive supply into the market.

• In Brazil, an even bigger soy exporter than the United States, the government said the soybean crop could be 12.8% bigger in 2024/25 than in the last season. But traders are keeping an eye on drought that threatens soy seeding and is supporting soy prices.

• Brazil’s Conab crop agency also forecast the country’s 2024/25 corn production at 119.8 million tons, up 3.6% from the previous season, but said exports would likely fall.