PARIS/SINGAPORE: Chicago wheat edged lower on Tuesday, consolidating after a rally on lower-than-expected U.S. supply forecasts as the market monitored talks to extend a Black Sea corridor from Ukraine beyond a deadline this week.
Corn and soybeans ticked down too, with spring planting progress and projections of record harvests in the United States weighing on prices.
Limited moves in grains also reflected a subdued mood in wider financial markets amid concerns about the economic outlook and political deadlock over a U.S. government borrowing limit.
Wheat extends gains on US crop outlook, Black Sea deal doubts
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.7% at $6.56-1/4 a bushel by 1044 GMT, easing back from a one-week high earlier in the session.
The contract had climbed 4% on Monday as the market reacted to U.S. Department of Agriculture’s 2023/24 projections on Friday. The USDA forecast the smallest hard red winter wheat crop since 1957 in the drought-hit U.S. Plains and projected overall U.S. wheat stocks at a 16-year low.
In a weekly crop progress report released after Monday’s close, the USDA estimated as unchanged the condition of U.S. winter wheat, whereas analysts had on average expected a slight improvement following recent rain relief.
Investors were also awaiting the outcome of negotiations to extend the deal allowing the safe export of Ukrainian grains through the Black Sea.
The Kremlin, which has repeatedly warned it could quit the agreement on May 18 over obstacles to its grain and fertilizer exports, said on Tuesday that questions remained about Russia’s part of the Black Sea grain deal and contacts were continuing.
“Beyond the Black Sea Grain corridor headlines, agriculture traders are watching U.S. weather and Brazil’s FOB (export) prices,” Peak Trading Research said in a note.
CBOT corn fell 0.5% to $5.89-1/2 a bushel and soybeans edged down 0.4% to $13.95-1/2 a bushel.
The USDA on Friday projected record U.S. harvests of both crops.
The agency then said on Monday that the U.S. corn crop was 65% planted and soybean planting was 49% complete, both slightly behind trade expectations, but still ahead of their respective five-year averages.
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