Wheat edges higher from two-month low as traders eye India’s import plans

CANBERRA: Chicago wheat futures rose on Tuesday, as a low harvest estimate for top exporter Russia and an indication that India could soon begin importing grain helped lift prices from two-month lows.

Soybean and corn futures fell as investors weighed the impact of heat and then flooding on crops in the United States.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.2% at $5.72 a bushel by 0451 GMT after falling to $5.64 on Monday, its lowest level since April 19.

Wheat rallied to a 10-month high of $7.20 last month after adverse weather in Russia led to sharp cuts to the country’s harvest estimates, but those price gains have almost completely unwound.

Argus on Monday cut its wheat production forecast for Russia to a three-year low of 79.5 million metric tons, well below estimates from Russian consultancies, which have stabilised in recent weeks as weather there improved.

Russian export prices are meanwhile declining as early harvesting data show high yields.

Another potential cause of tighter supply would be Indian imports of wheat, with a government official saying that the country has imposed limits on wheat stocks and may abolish or trim the import tax on the grain.

The possibility of Indian imports is the only clear bullish signal in the market, said Vitor Pistoia, an analyst at Rabobank in Sydney.

Pressuring prices meanwhile are a rapidly progressing US harvest that is giving good yields, and improved cropping conditions in exporters like Australia and Canada, Pistoia said.

Russian wheat export prices decline further after yield data

“There’s been a lot of profit taking by managed money,” he said.

“I’m not expecting a further price decrease but I’m also not expecting a big recovery.” In other crops, CBOT September corn was down 0.4% at $4.37-1/2 a bushel and soybeans were 0.2% lower at $11.28 a bushel.

While both markets are well supplied, weather concerns were supporting prices, with forecast dryness in the Black Sea region likely to stunt corn yields and heavy rain after near-record temperatures in the United States threatening to take a toll soybeans and corn, whose condition deteriorated last week.