Wheat slips further as Russian rain forecast eases supply fears

CANBERRA: Chicago wheat futures on Tuesday fell further from last week’s four-month highs as forecasts for rain in key Russian cropping regions eased supply concerns. Soybean and corn futures also slipped amid plentiful supply.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.1% at $6.01-3/4 a bushel by 0303 GMT after falling more than 2% on Monday.

These falls follow seven days of gains during which worries about adverse weather affecting crops in Russia, the United States and Europe pushed prices from around $5.50 a bushel as high as $6.33-1/4 on Friday.

“The move was overdone, which is why it’s coming off a bit,” said Ole Houe, director of advisory services at IKON Commodities in Sydney.

The impact of current weather issues is unlikely to meaningfully affect the global supply-demand balance, he said, predicting that prices would fall back to their recent trading range between $5.25 and $5.75.

Analysts still expect the global market to shift from the shortages of recent years to surplus.

Dry conditions persist in parts of the United States, with the US Department of Agriculture (USDA) saying last week that around 30% of US winter wheat was located in an area experiencing drought as of April 23.

A weekly USDA crop progress report on Monday showed 49% of the US winter wheat crop rated in good-to-excellent condition, down 1% from last week but still the highest for this time of year since 2020.

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In Europe, meanwhile, wet weather has pushed down harvest projections.

In other crops, CBOT soybeans were down 0.6% at $11.74-3/4 a bushel and corn fell 0.4% to $4.47-1/2 a bushel.

Soybeans, corn and wheat all hit their lowest levels since 2020 earlier this year, with speculative investors amassing large bearish futures positions amid expectations of ample supply.

In soybeans, prices got some support on Monday from Argentina’s SOEA oilseed workers’ union, which kicked off a strike to protest a labour reform bill backed by President Javier Milei.

However, US soybeans are being out-competed by cheap South American supplies, keeping a lid on Chicago futures.

Commodity funds were net buyers of CBOT soybeans on Monday but net sellers of wheat and corn, traders said.