PARIS/CANBERRA: Chicago wheat futures edged lower on Tuesday after hitting their highest since last July as prices faced chart resistance and traders sought a clearer picture on the impact of dry, cold weather on crops in top wheat exporter Russia.
Corn edged up while soybeans fell as investors assessed crop losses in South America and US planting progress. The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.0% at $6.80 a bushel by 1219 GMT.
It earlier rose to $6.96, slightly above a previous 9-1/2 month peak struck on Monday, but again remained shy of the psychological $7 threshold.
In Europe, September wheat on Euronext fell 1.6% to 254.50 euros ($274.78) per metric ton. It hit its highest since late July on Monday at 259.75 euros, but ran into resistance near the 260 euros level.
Unseasonable frosts have struck central and southern Russia this month, adding to the strain on wheat crops that had endured very dry weather in recent months.
Consultants IKAR cut their forecast for the country’s wheat crop by 5 million metric tons to 86 million tons on Monday, adding to concern about potential crop damage.
Russia has lost crops on about 500,000 hectares this year due to bad weather, the nominee for agriculture minister Oksana Lut told parliament on Tuesday.
However, traders were awaiting further indications on the extent of weather damage while forecasts suggested greater chances of rain relief in southern Russia this week.
“Time remains for Russian wheat conditions to improve and alleviate market anxieties,” analysts at Rural Bank said in a note. “So we can expect markets to stay volatile in the short-term.”
The rally in wheat has been amplified by the covering of short positions that investment funds had accrued when prices fell to three-year lows in early 2024.
Steady US winter wheat conditions, which last week held at a four-year high, according to US government data released on Monday, encouraged prices to consolidate.
The US Department of Agriculture also estimated that US corn planting was running behind the average pace of recent years while soybean planting was slightly ahead. CBOT corn added 0.3% to $4.73-3/4 a bushel after reaching its highest since late December.
Soybeans fell 0.8% to $12.09-1/4 a bushel, curbed by weakness in related vegetable oil and mineral oil markets.
Brazilian crop agency Conab on Tuesday raised its forecast of the country’s soybean crop, though it cut its estimate of the average soy yield as it factored in flooding in Rio Grande do Sul state.
Comments
Comments are closed.