CANBERRA: Chicago wheat futures slipped for a second day on Friday, as traders injected some caution into a rally fuelled by drought in top producer Russia that pushed prices to 3-1/2-month highs earlier in the week.
Corn futures also eased after reaching a three-month peak on Wednesday, although further gains in oil prices amid the Middle East conflict continued to support prices by boosting plant-made ethanol.
Wheat pauses for breath as Black Sea supply fears fuel rally
Soybeans fell as forecasts for rain in top producer Brazil boosted the supply outlook.
Fundamentals
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The most-active wheat contract on the Chicago Board of Trade was down 0.8% at $5.99 a bushel, as of 0017 GMT. The contract on Wednesday touched $6.17, its highest since June 14.
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Prices are still up around 3.4% this week.
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CBOT corn slipped 0.6% to $4.25-1/2 a bushel, having hit $4.34-1/4 on Wednesday, its highest since June 28. The contract was set for a 1.8% weekly gain.
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Soybeans were flat at $10.45-3/4 a bushel and down 1.9% so far this week.
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All three contracts fell to four-year lows in recent months, but have regained a little ground as central banks cut interest rates, the US dollar weakened and adverse weather threatened supply.
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Oryol on Wednesday became the latest Russian region to declare a state of emergency due to adverse growing conditions, and the country’s grain exporters’ union called for a quota mechanism to limit shipments, heightening supply concerns.
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A spat between Russia and Kazakhstan, meanwhile, led to Moscow effectively banning imports and transit of Kazakh grain through Russian territory, Kazakh officials said.
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US weekly wheat export sales reported by the government on Thursday exceeded expectations.
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On the demand side, however, Reuters reported that Egypt, one of the world’s biggest wheat buyers, has developed plans to slash imports and use more corn or sorghum in state-subsided bread.
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In other crops, dry conditions are likely to impede corn planting efforts in Argentina’s main agricultural core over the next seven days, the Buenos Aires grains exchange said.
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US weekly corn exports came in well above analysts’ expectations.
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