SINGAPORE: Chicago wheat futures bounced back on Friday, rising almost 1% and set for a weekly gain as a severe drought is reducing US winter crop supplies, although expectations of ample production in other key exporting countries limited gains.
Corn and soybeans inched higher. “The strong dollar was seen as a negative force, but traders remain concerned with the southern Plains wheat crop,” commodities research firm Hightower said in a report.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.9% at $6.09-1/2 a bushel, as of 0336 GMT.
Corn rose 0.2% to $5.91-3/4 a bushel and soybeans gained 0.3% at $13.27-1/4 a bushel. For the week, wheat has gained 0.7%, corn is up 6.7% and soybeans have added 1.5%.
Lower production of hard red winter wheat in the United States is supporting prices, even though there are expectations of large global output with farmers in the northern hemisphere set to harvest their bumper crops in the coming months.
The US Department of Agriculture (USDA) reported weekly net export sales reductions of 75,200 tonnes for US old-crop corn in the week ended May 18.
Net new-crop corn sales totalled only 52,100 tonnes, near the low-end of analysts’ expectations. Weekly export sales of US old-crop soybeans were 115,000 tonnes at the low-end of trade expectations, and new-crop sales were below expectations at 1,100 tonnes.
For US wheat, the agency reported net reductions of 45,100 tonnes for old-crop export sales.
Net new-crop wheat sales totalled 245,100 tonnes, toward the low-end of expectations.
Ukrainian 2023 spring grain sowing was 97% complete at almost 5.3 million hectares on May 25, agriculture ministry data showed on Thursday.
CBOT wheat may retest support at $5.94-3/4
India is likely to harvest a record 112.7 million tonnes of wheat in 2023, the farm ministry said on Thursday, reiterating its previous estimate of 112.2 million tonnes despite lower crop yields due to unseasonal rains in February and March.
However, concerns linger over the implementation of the Black Sea grain deal, which was extended last week.
Dozens of ships are unable to reach Ukraine, days after a Black Sea grain deal was extended and the pace of shipments is unlikely to pick up because of slow inspections and other uncertainties, according to data and three sources.
Commodity funds were net sellers of CBOT corn, soybean and soymeal futures contracts on Thursday, traders said.
Funds were net buyers of soyoil contracts, and net even in wheat contracts at the CBOT, traders said.
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