Wheat rises nearly 2% after deep losses as bargain-hunting kicks in
Chicago wheat climbed 1.7% on Monday as bargain-hunting supported prices after the market dropped more than 6% in the previous session to a three-year low on data pegging U.S. wheat production above expectations.
Soybeans lost more ground, while corn ticked higher with U.S. harvest likely to weigh on prices of both products.
“U.S. wheat crop is now bigger than what was expected,” a Singapore-based trader said. “It is likely to be bearish for the wheat market given the fact that Ukraine is able to export wheat through sea route despite Russian attacks.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) rose 1.7% to $5.50-3/4 a bushel, as of 0449 GMT, after dropping on Friday to $5.40 a bushel, its lowest since September 2020.
Soybeans gave up 0.5% to $12.68-1/4 a bushel and corn added 0.5% to $4.79 a bushel.
The U.S. Department of Agriculture (USDA) estimated the nation’s now completed wheat harvest at 1.812 billion bushels, 78 million bushels bigger than a previous estimate and significantly above the average analyst forecast of 1.729 billion bushels in a Reuters poll.
Wheat prices had already been under pressure from ample Russian supplies and signals that Ukraine was managing to find export routes.
Five more ships are on their way to Ukrainian sea ports using a new corridor opened to resume predominantly agricultural exports, an alternative arrangement to the Black Sea grain deal blocked by Russia, a top Ukrainian official said on Sunday.
In a separate report, the USDA said U.S. wheat stocks as of Sept. 1 stood at 1.780 billion bushels, up slightly from 1.778 billion bushels reported a year earlier and reflecting poor export demand for U.S. supplies.
U.S. soybean stocks fell to their lowest in two years but were larger than analysts expected.
The USDA’s quarterly report showed 1.361 billion bushels of corn, below analysts’ average estimate of 1.429 billion bushels.
A key stretch of the lower Mississippi River dropped last week to within inches of its lowest-ever level and is expected to remain near historic lows just as the busiest U.S. grain export season gets underway, according to the National Weather Service.
Low water has slowed hauling of export-bound corn and soybean barges over recent weeks as shippers lightened loads to prevent vessels from running aground and reduced the number of barges they haul at one time to navigate a narrower shipping channel.
Elsewhere, India’s monsoon rainfall this year was its lowest since 2018 as the El Nino weather pattern made August the driest in more than a century, the state-run weather department said on Saturday.
Rainfall over the country during June to September was 94% of its long-period average, the lowest since 2018, the India Meteorological Department said in a statement.
Large speculators increased their net short position in CBOT corn futures in the week to Sept. 26, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut their net long position in soybeans.
Source: Reuters (Reporting by Naveen Thukral; Editing by Rashmi Aich and Eileen Soreng)
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