CANBERRA: Chicago wheat prices edged lower on Friday but were still set for their biggest weekly rise since June amid fears that dry weather will reduce some harvests and after a ship in the Black Sea struck a mine, threatening Ukrainian grain exports.
Corn futures were little changed but on track for their biggest weekly gain since May.
Soybeans rose slightly. Wheat reached a three-year low last week amid massive supply of cheap grain from Russia but the price fall stimulated buying of US grain, helping put a floor under the market, said Rod Baker, an analyst at Australian Crop Forecasters.
“That definitely sparked a bit of demand,” he said.
Prices will likely continue around current levels if wheat continue to flow from Ukraine but attention should later turn to harvests in Argentina and Australia that could be relatively small, squeezing supply, he said.
The most-active Chicago Board of Trade (CBOT) wheat futures were down 0.2% at $5.77-1/4 a bushel by 0343 GMT but up 6.6% this week.
CBOT corn rose 0.1% to $4.97-3/4 a bushel and 4.4% for the week, while soybeans were 0.2% higher at $12.83-1/4 a bushel and up 0.6% from last Friday’s close.
A Turkish-flagged general cargo ship hit a mine in the Black Sea and suffered minor damage on Thursday.
Wheat rises from 3-year low on bargain hunting; US supplies weigh
A Ukrainian government source said it was “probably a World War II mine or the landing mines that were left there last year”, but the event came shortly after Britain said Russia may target civilian shipping, including by laying sea mines on the approach to Ukrainian ports.
The news highlighted the difficulty of exporting from Ukraine by sea, the cheapest and easiest available route.
Meanwhile, several harvest downgrades were reported, pointing to tighter markets and potentially higher prices in coming months.
Ukraine’s agriculture minister said the country was likely to sow less winter wheat than it initially expected for the 2024 harvest due to prolonged absence of rain across most regions.
Grain trade association Coceral lowered its estimate of this year’s soft wheat crop in the European Union and Britain to 141 million metric tons from 142.4 million in June, mainly due to dry weather.
Argentina’s Rosario grains exchange said the country’s agricultural heartland needs more rain soon to avoid wheat productivity losses.
Dry weather has also hit wheat crops in Australia, though rain in recent days gave some relief.
On the demand side, Asian flour millers looking at the tighter supply outlook are likely to step up purchases.
Moving away from wheat, the Buenos Aires grains exchange said Argentine land planted with corn for the 2023/24 season could be less than expected if there is no rain in coming weeks.
In soybeans, Argentina’s processing plants are running out of beans after a historic drought cut the crop in half, the head of the country’s grains export chamber said.
Chicago corn and soybeans are near multi-year lows as US sellers struggle to compete with supplies from Brazil, the top exporter, which has seen a record harvests.
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