Wheat Prices Surge Amid Global Supply Worries; Soybeans Tumble
— June 3, 2024
SINGAPORE (AIA) Chicago wheat bounced back on Monday, rising more than 1% after three sessions of declines, as worries over global supplies underpinned the market, which hit a 10-month high last week. Soybeans slid to a one-month low, weighed down by US planting progress and ample South American supplies.
“The Black Sea weather issue is driving wheat prices higher,” said one Singapore-based trader. Lower wheat production in Russia can significantly impact world supplies and the availability of competitively priced wheat cargoes. The most-active wheat contract on the Chicago Board of Trade (CBOT) added 1.2% to $6.86-3/4 a bushel as of 0321 GMT.
The contract hit its highest since late July at $7.20 a bushel on Tuesday but slid towards the end of the week. Soybeans fell 0.9% to $11.94-1/4 a bushel, having slid to $11.94 earlier in the session, the weakest since May 2. Corn edged 0.1% lower to $4.46 a bushel. Forecasts for a smaller Russian wheat harvest due to persistent drought and frost pushed prices to a 10-month high last week. However, prices eased at the end of the week on expectations of much-needed rains.
The condition of French soft wheat continued to deteriorate last week as wet weather persisted in crop belts, with the share of the crop in good or excellent condition falling to the lowest level this growing season and remaining at a four-year low. Rainfall will likely be below normal in the western part of Argentina’s agricultural heartland over the next three months, the country’s National Weather Service reported on Friday, forecasting normal to below-normal rainfall for the rest of the Pampas region.
Still, rain in parched areas of Western and Southern Australia and more expected in the coming days could add as much as a million tonnes to the country’s wheat harvest, analysts said this week.
The US farmers have made steady progress; planting corn and soybeans between showers and rain could help the early growth of this year’s crops. The US soybean crush likely dropped in April to a seven-month low of 5.265 million short tonnes, or 175.5 million bushels, according to analysts surveyed by Reuters ahead of a monthly US Department of Agriculture report due on Monday.
Large speculators increased their net short position in CBOT corn futures in the week to May 28, regulatory data released on Friday showed. The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and trimmed their net short position in soybeans.