Chicago wheat futures hit 10-month high

CANBERRA: Chicago wheat futures rose on Wednesday to their highest levels since last July as adverse weather led to further downgrades of harvest estimates in Russia, the biggest exporter, fuelling a rally that has pushed prices up 18% so far this month.

Also helping wheat were concerns of crop damage spreading to Ukraine, another major global supplier, and a decline in crop condition ratings in the United States.

Corn and soybean futures also rose. Weather events are causing increasing price volatility as northern hemisphere harvests that deliver most of the world’s wheat near, said Andrew Whitelaw at consultants Episode 3 in Canberra.

Rainfall was also needed in parts of Australia to guarantee a good crop, Whitelaw said, adding that prices could rise further in the coming days, albeit with some volatility.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1.8% at $7.09-3/4 a bushel, as of 0538 GMT, after rising as high as $7.11-1/4.

CBOT soybeans were up 0.3% at $12.40-1/2 a bushel and corn was nearly 1% higher at $4.62 a bushel. All three contracts hit their lowest levels since 2020 earlier this year, but have rebounded as supply outlooks tightened. Wheat has gained most, up 35% from a low seen two months ago.

Russia’s IKAR agricultural consultancy cut its forecast for the country’s wheat harvest to 83.5 million metric tons from 86 million tons, its third downgrade this month but still an above-average crop, Whitelaw said.

Most forecasters predicted a harvest of well above 90 million tons before dry weather and bitter frosts hit. In Ukraine, a state weather forecaster said frosts had not significantly damaged crops but traders are on edge after consultants APK-Inform on Monday warned of yield losses.

“Russia and Ukraine are expected to account for 33% of world wheat exports in the current marketing year. These two countries essentially set the world cash wheat price,” StoneX analyst Arlan Suderman wrote in a note. Meanwhile, the US Department of Agriculture (USDA) lowered its US winter wheat crop condition rating to 49% good to excellent from 50% in a weekly crop progress report on Monday. The rating came in 2% below analysts’ expectations but is still the best for this time of year since 2020.