CANBERRA: Chicago wheat futures rose on Tuesday despite a strengthening dollar and huge exports of cheap grain from Russia that are keeping prices near their lowest since 2020. Corn and soybean futures also edged higher but were close to 4-year lows.
Chicago Board of Trade (CBOT) wheat futures for May delivery were up 0.6% at $5.55-1/4 a bushel by 0259 GMT after falling as low as $5.24 last month.
CBOT soybeans was up 0.2% at $11.60-3/4 a bushel and corn climbed 0.1% to $4.31-3/4 a bushel.
The dollar rose to its strongest since Nov. 2 against a basket of currencies, making US farm goods costlier for buyers with other currencies and potentially damaging demand.
Consultants Sovecon estimated that Russia would export 4.2-4.6 million metric tons of wheat in April, compared with a record-high 4.4 million tons a year ago.
Russia shipped around 4.9 million tons in March, the most for any March on record.
“For most of 2024, we expect global grains and oilseed markets to be oversupplied and prices subdued,” Commonwealth Bank analyst Dennis Voznesenksi said in a research report.
“The continuous pressure of Russian wheat exports onto world markets, Brazil’s large exports of corn and soy and the upcoming European and north American winter crop harvests (wheat and barley) are expected to continue weighing on markets,” he said, predicting that low farm profits would eventually reduce supply and lift prices.
Speculative investors are betting on further price falls for all three crops but their large net short position leaves the markets vulnerable to bouts of short covering that push prices up.
A US Department of Agriculture (USDA) weekly crop progress report rated 55% of the US winter wheat crop as being in good-to-excellent condition, down 1% from last week but still the highest for this time of year since 2020.
The relatively strong wheat ratings underscore a shift in global grain supplies to surplus after shortages in recent years.
In soybeans, prolonged rainfall in Argentina’s farming heartland fuelled fears of delays to the ongoing harvest that could cause production losses, the Rosario grains exchange said.
US soy crushers processed a record quantity of soybeans in March, although the daily crush pace slowed slightly from a record high in February, according to National Oilseed Processors Association (NOPA) data.
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