CANBERRA: Chicago wheat futures fell on Monday but remained near four-month highs after concerns that adverse weather conditions in Russia, Europe and the United States could reduce supply pushed prices up around 10% last week.
Corn and soybean futures were little changed.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.5% at $6.19 a bushel by 0350 GMT after rising to $6.33-1/4 on Friday, its highest since Dec. 29.
In Russia, the world’s biggest wheat exporter, the state weather forecaster said it sees a threat of drought persisting in May in the eastern half of the Southern Federal District.
“Russia’s drying trend has emerged as a major issue for wheat and other winter crops,” independent analyst Tobin Gorey said.
“Russia’s southern region and Ukraine’s east are on path to deficient soil moisture … These regions are hefty exporters so they materially impact wheat supply,” he said, adding that dry weather in parts of the United States was putting crops there “on a path to yield decline”.
Russia’s 2024 grain harvest could drop to 132 million metric tons from 144.9 tons in 2023, the country’s agriculture ministry said last week.
Freezing conditions in parts of Europe also fed supply concerns, with the European Commission last week cutting its forecast for the EU’s main wheat crop in 2024/25 to a four-year low.
In France, the EU’s top producer, the condition of soft wheat crops edged down last week to remain at a four-year low, data from farm office FranceAgriMer showed.
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Friday was CBOT wheat’s seventh consecutive daily price gain, the rally accelerated by speculative investors buying back some of their large short positions.
The price gains follow a long period during which plentiful cheap supply from the Black Sea pushed the market lower.
CBOT wheat fell in March to $5.23-1/2, its lowest since 2020.
Russia continues to ship record quantities of wheat after two consecutive bumper harvests.
Ukraine’s grain exports could also total 6-7 million tons in April despite Russian attacks on its port infrastructure.
In other crops, CBOT soybeans rose 0.2% to $11.79-3/4 a bushel and corn was up 0.1% at $4.50-1/4 a bushel. Both contracts are near four-year lows due to plentiful supply.
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