Wheat rebounds on supply uncertainty, harvest pressure weighs on corn
SINGAPORE: Chicago wheat rose on Wednesday, recouping some of this week’s losses as uncertainty over supplies from Ukraine and expectations of lower output in key exporting countries supported prices.
Corn lost ground, while soybeans inched higher with both markets likely to remain under pressure from advancing harvest in the US “There is likely to be further wheat production downgrade in Australia and Canada,” a Sydney-based analyst said.
“Supplies could tighten towards the end of the year.” Most-active Chicago Board of Trade (CBOT) wheat contract added 0.8% at $5.88-1/2 a bushel, as of 0341 GMT, after falling 3.4% over the previous two sessions.
CBOT corn slipped 0.3% to $4.74-3/4 a bushel after rising 1% on Tuesday and soybeans rose 0.1% to $13.16-1/2 a bushel.
A cargo vessel carrying 3,000 metric tons of wheat left the Ukrainian port of Chornomorsk on Tuesday for the first time since a grain export deal with Russia collapsed, raising hopes that it would become easier for Ukraine to ship grain.
However, three eastern European countries have banned food imports from Ukraine, likely making it harder for Ukraine to export grain overland, analysts at Commerzbank said.
“Concerns about a noticeably lower Ukrainian supply, especially of wheat and corn, are likely to lend further support to prices in the short term,” Commerzbank said. Ukraine appealed to Poland, Slovakia and Hungary to embark on “constructive dialogue” to end their dispute.
Wheat has been driven down by huge shipments from Russia, where export prices continued to decline last week. CBOT wheat futures touched a 33-month low on Sept. 12.
Supporting prices are expectations that hot and dry weather will reduce southern hemisphere harvests, with Australia declaring on Tuesday that an El Nino weather event was underway in the country.
European Union data showed that soft wheat exports since the start of the 2023/24 season in July reached 6.32 million tons by Sept. 17, down 27% from a year earlier.
US harvest pressure in weighing on soybean and corn futures. Brazilian crop supply agency Conab projected the country’s 2023/24 crop at 162.4 million metric tons, up 5.1% from the previous year.
CBOT soybean prices hit a five-week low of $13.08 a bushel on Tuesday as US crops struggle to compete with Brazilian supply.
Turning to corn, which is sitting near 33-month lows amid a global supply glut, Conab said Brazil’s crop would fall by 9.1% to 119.8 million tons.
Commodity funds were net buyers of Chicago corn and soymeal futures on Tuesday and net sellers of wheat, soyoil and soybeans, traders said.
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