SINGAPORE: Chicago wheat futures rose on Tuesday, regaining some of last week’s lost ground, as expectations of lower output in key exporting countries, including Australia underpinned the market.
Corn and soybeans rose with expectations of dry weather in the US Midwest likely to hit yields.
“Australia’s lower output estimate was expected but the weather in September is key,” said a Singapore-based trader.
“If it remains dry in September, we are looking at further downgrades in Australia’s wheat crop.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1% at $6.01-1/4 a bushel, as of 0406 GMT, having given up more than 4% last week.
Corn gained 0.5% at $4.84 a bushel and soybeans rose 0.2% to $13.71-1/4 a bushel.
Several top-producing nations have noted production issues, including Australia, Argentina and Canada. Australia’s wheat output is forecast to drop by 800,000 metric tons to 25.4 million tons from an earlier estimate and decline 36% from last year as dry weather curbs yields, the Australian Bureau of Agricultural and Resource Economics and Sciences said on Tuesday.
The Buenos Aires grains exchange said the 2023/24 wheat crop had taken a hit from extreme weather.
Canada, the world’s No. 4 wheat exporter, last week estimated lower output due to dry weather.
Turkish President Tayyip Erdogan said after talks with Russia’s Vladimir Putin on Monday that it would soon be possible to revive the grain deal that the United Nations says helped ease a food crisis by getting Ukrainian grain to market.
Russia quit the deal in July – a year after it was brokered by the United Nations and Turkey – complaining that its own food and fertiliser exports faced serious obstacles.
Russia’s IKAR agriculture consultancy said Moscow could export 49.5 million metric tons (mmt) of wheat in the 2023/24 season, 2 mmt more than it previously forecast, based on a revised estimate for the country’s wheat crop to 91.0 mmt from an earlier 89.5 mmt.
Egypt’s state grains buyer bought about half a million metric tons of Russian wheat in a private deal, four traders told Reuters, succeeding in negotiating lower prices than those offered in the more traditional tenders.
In the soybeans market, concerns that dry weather harmed US beans at a key development stage have fuelled a price rally. Large speculators trimmed their net short position in Chicago corn futures in the week ended Aug. 29, 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 raised their net long position in soybeans.