Wheat near 5-year low as global supply weighs

PARIS/CANBERRA: Chicago wheat futures edged down for a third session on Wednesday to approach a five-year low as a stronger dollar and expectations of rising global supply curbed prices.

Corn ticked down and soybeans edged higher as traders assessed US harvest progress while awaiting details of US farm aid expected to be announced this week in response to halt to Chinese imports of US soy.

Grain futures have traded in narrow ranges this week, with

a US government shutdown that has disrupted agricultural data depriving the market of usual direction.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.2 percent at USD5.06 a bushel at 1046 GMT, approaching a five-year low of USD5.00-3/4 struck in August.

After slower-than-usual Russian exports supported a brisk start to the US export season, signs that Russia is accelerating its wheat shipments have tempered export sentiment.

Consultancy Sovecon raised its estimate of Russia’s September wheat exports by 0.3 million metric tons to 4.6 million tons and forecast shipment of 5 million tons in October.

The dollar’s strength this week, partly reflecting a drop in the euro amid a worsening political crisis in France, has curbed the competitiveness of US grain overseas.

Moreover, following large northern hemisphere production, upcoming harvests in southern hemisphere exporters Argentina and Australia now look better than initially expected, said Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney.

“Our forecast is for CBOT prices to stay slightly above USD5,” he said. “But I see no significant upside for the time being.”

Rainfall in dry parts of the Black Sea region and the U.S Midwest has also improved early prospects for wheat being planted for next year’s harvest.

CBOT corn was down 0.1 percent at USD4.19-1/4 a bushel and CBOT soybeans were up 0.2 percent at USD10.23-3/4 a bushel.

Talk of some lower US harvest yields than anticipated has helped underpin corn and soybean markets, though projections of large overall production and the absence of Chinese purchases were capping prices, traders said.

The market is awaiting the reopening of Chinese markets on Thursday, following the National Day holiday, for further pointers about the country’s demand.