SINGAPORE: Chicago wheat futures eased on Friday, although the market was poised for a third straight monthly gain as tightening global supplies after Russia’s invasion of Ukraine underpinned prices.
Corn was set for a fifth monthly gain as support stemmed from forecasts of more showers, which will further delay planting in the rain-soaked US Midwest.
“There is no reason for wheat prices to decline,” said a senior executive with an international trading company. “We are seeing supply constraints as well as strong demand.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) has gained almost 8% in April. The market was trading down 0.2% at $10.83-1/4 a bushel, as of 0359 GMT.
Corn has added 8.5% this month, while soybeans are up 4.4%.
Russia’s invasion of Ukraine has curbed wheat exports from the Black Sea region, a key supplier.
In addition, there are worries about adverse weather hurting US winter wheat production.
The Biden administration is asking Congress to approve $500 million for the farm sector, in a bid to woo US wheat producers to double-crop their fields, and boost how much the federal government will spend on short-term loans to farmers who grow certain food crops.
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Good moisture reserves in soil, an important factor in the healthy development of crops, will benefit the harvest in Russia’s main wheat-producing regions this year, state weather forecaster Hydrometcentre said on Thursday.
Signs of strong export demand added support for the corn market. Private exporters reported the sale of 1.088 million tonnes of corn to China, the US Department of Agriculture said.
A weekly report showed corn export sales totalled 1.710 million tonnes, up 35% from a week earlier.
In the edible oil market, Indonesia should be able to tackle its cooking oil shortage in the next few weeks and lift an export ban on palm oil and its refined products in May, an industry body said on Thursday, a day after a last-minute policy U-turn sparked more alarm for markets.
Commodity funds were net buyers of CBOT soyoil and corn contracts on Thursday, traders said. The funds were net sellers of CBOT soybeans, wheat and soymeal.