Wheat rises as traders brace for Canadian rail stoppage
Chicago wheat futures rose slightly on Thursday amid concerns over a potential Canadian rail stoppage, which could disrupt North American exports. However, abundant supplies from the Black Sea region kept prices near four-year lows. Corn futures edged higher, while soybeans fell, both remaining near their lowest levels since 2020 due to expectations of a strong U.S. harvest. The U.S. Department of Agriculture reported continued soybean sales to China, but overall exports remain low due to competition from cheaper South American crops.
CANBERRA, Aug 22 (Reuters) -Chicago wheat futures rose on Thursday as the market braced for a potential Canadian rail stoppage that would disrupt exports from North America, but plentiful supply from the Black Sea region kept prices near four-year lows.
Chicago corn futures edged higher and soybeans fell, with both crops near their lowest since 2020 as a major crop tour reinforced expectations of bumper U.S. production.
FUNDAMENTALS
* The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.3% at $5.45-1/2 a bushel at 0104 GMT. However, prices fell 2.3% on Wednesday and are not far from last month’s four-year low of $5.14.
* CBOT corn Cv1 rose 0.1% to $3.98-1/2 a bushel and soybeans Sv1 fell 0.3% to $9.78-3/4 a bushel.
* Canada’s freight rail transport could come to a grinding halt on Thursday following deadlocked talks over labour contracts, threatening exports of Canadian and U.S. wheat.
* However, large expected wheat harvests in Russia and North America are keeping a lid on prices, and global demand has been lacklustre, with China, a major buyer in the first half of the year, forecast to slow its imports.
* Scouts on the annual Pro Farmer tour of the U.S. Midwest reported that Indiana’s soybean pod count is the largest in 22 years and the state’s corn yield prospects are at a three-year high. They also said Nebraska’s corn yield prospects and soybean pod counts are at levels not seen since 2021.
* A rapid weakening of the U.S. dollar due to expectations of interest rate cuts has helped support prices by making U.S. crops more competitive on global markets, but the currency was slightly stronger on Thursday. FRX/ USD=
* The U.S. Department of Agriculture on Wednesday reported a third consecutive day of soybean sales to China.
* Overall exports to China have been low, however, amid competition from cheap South American crops.
* “U.S. soybean shipments into China are down 7.22 million metric tons or 265 million bushels for the marketing year that began September 1, and that trend is expected to continue for the next marketing year as well,” StoneX analyst Arlan Suderman wrote in a note.
* Speculators are betting on lower prices for CBOT wheat, corn and soybeans. Commodity funds were net buyers of soy and corn on Wednesday and net sellers of wheat, traders said.
MARKETS NEWS
* Global shares idled on Wednesday after a lengthy rebound propelled them towards recent record highs, and as investors awaited confirmation that the U.S. Federal Reserve would cut interest rates as expected.
Source Link : https://www.xm.com/research/markets/allNews/reuters/wheat-rises-as-traders-brace-for-canadian-rail-stoppage-53910183
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