SINGAPORE: Chicago wheat rose on Friday, after climbing earlier this week to a nearly 10-month high, with concerns over Russian output underpinning prices, although expectations of a bumper crop in the US limited gains.
Soybeans gain more ground on concerns over South American production and corn also ticked higher.
“Bullish sentiment in the market has been driven by weather concerns in Brazil, where heavy flooding has affected the largest wheat-producing state, and in Russia, where major grain-producing areas declared a state of emergency due to frosts damaging crops,” according to a report from BMI, a unit of Fitch Solutions.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.3% at $6.65-1/2 a bushel, as of 0309 GMT, having reached its highest since late July at $6.97 a bushel on Wednesday.
Soybeans added 0.7% to $12.24-3/4 a bushel, while corn gained 0.4% at $4.59 a bushel.
Wheat prices have rallied in recent weeks due to adverse weather in the world’s biggest exporter Russia, with the country’s agriculture ministry saying the frost had killed about 1% of the total crop.
However, scouts on an annual tour of Kansas wheat fields projected better-than-average yields in the top US winter wheat state, reflecting improved moisture after several years of drought.
The tour estimated Kansas wheat’s yield potential at 46.5 bushels per acre after scouting 449 fields over three days.
The figure is the highest since 2021 and falls above the five-year tour average of 42.4 bpa from 2018-2023. For soybeans, expectations of lower output in South America supported prices.
Chicago wheat futures up on renewed worries
Argentina’s Buenos Aires grains exchange on Thursday trimmed its estimate for the 2023/24 soybean harvest to 50.5 million metric tons from 51 million tons, citing hot and dry weather in March in northern regions.
The harvesting of soybeans, corn and rice in Brazil’s flood-devastated Rio Grande do Sul advanced slowly in the last week as relentless rains and stubbornly high waters failed to subside, disrupting work.
According to state crop agency Emater on Thursday, soybean harvesting in the country’s second-largest producing state reached 85% of the area, up from 78% last week, even as weather conditions remained unfavourable and severely damaged crops.
Dismal demand for US agricultural products could trim gains in futures contracts. The US soybean crush plunged in April to a seven-month low, missing all trade estimates, while soyoil stocks unexpectedly declined for the first time in six months, according to National Oilseed Processors Association data.
The US Department of Agriculture reported export sales of new-crop US wheat last week at 304,300 metric tons and old-crop US corn at 742,200 metric tons, both near the low end of trade expectations. Weekly export sales of old-crop US soybeans were 265,700 metric tons, below trade expectations.
Commodity funds were net sellers of CBOT corn, wheat and soymeal futures contracts on Thursday and net buyers of soybean and soyoil futures, traders said.
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