CANBERRA: Chicago wheat futures rose on Thursday, recouping some of their losses from the previous session, as the US dollar weakened and an exchange in Argentina said less of the crop would be planted there than previously thought.
Still, prices remained close to their lowest levels since 2020 due to ample supply from top shipper Russia and lacklustre demand for US exports.
Corn and soybean futures fell slightly, with both markets well-supplied despite rising concerns over Argentina’s corn harvest, which has been hit by a stunt disease spread by leafhopper insects.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.3% at $5.54 a bushel, as of 0205 GMT, after a 2.2% fall on Wednesday.
It was near a four-year low of $5.24 reached in March. Prices will likely remain stuck between $5.25 and $5.75 for the time being, said Ole Houe, director of advisory services at IKON Commodities in Sydney.
“It’s unlikely that we’ll go lower than $5.25,” he said, adding that the Middle East and Black Sea conflicts could still disrupt trade and push up prices, something that would wrong-foot speculators who have amassed large short positions.
The dollar slipped from Tuesday’s 5-1/2-month high, but its strengthening in recent months has made US exports less attractive to global buyers with other currencies.
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US wheat export inspections this marketing year are running well behind the pace of the previous season.
Wary of a La Nina weather event and drought, Argentine farmers are likely to plant 5.9 million hectares with wheat in the 2024/25 season, well below the average of the last five years, the Buenos Aires grain exchange said.
The global wheat market, however, is in surplus and the International Grains Council has forecast a rise in world production during the 2024-2025 marketing season.
Traders were monitoring dry conditions in the southern US Plains and parts of Russia, but forecasts predicted rain in parts of both regions.
Low wheat prices mean profit is growing further out of reach for US farmers and many do not expect to break even in 2024. In other crops, CBOT soybeans fell 0.2% to $11.61-1/2 a bushel and corn was down 0.1% at $4.29-3/4 a bushel.
Both contracts were hovering near four-year lows hit in February.
Corn harvest estimates for Argentina, the world’s No. 3 exporter, are likely to be cut even further due to a stunt disease, a Rosario grains exchange analyst said.
The exchange slashed its forecast by 6.5 million tons to 50.5 million tons last week and the USDA has also cut its estimate by 6 million tons to 51 million tons.
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