Chicago | Reuters – Chicago Board of Trade (CBOT) wheat futures settled just over 1 per cent higher on Monday, climbing for the third time in the last four sessions, underpinned by lower estimates for output in top exporter Russia.
Soybeans and corn settled higher after closing down on Friday, as the focus turned to unfavourably dry weather this week in parts of the U.S. Midwest.
SovEcon, one of Russia’s leading agriculture consultancies, said on Friday it had lowered its forecast for Russia’s grain exports in the 2019/20 marketing season, which started on July 1, by 7 million tonnes to 41.9 million tonnes.
The most-active wheat contract on the CBOT settled up 7-1/2 cents, or 1.3 per cent, at $5.03-1/2 a bushel. Corn settled up 2-1/2 cents, or 0.5 per cent, at $4.27 a bushel and soybeans settled 3-1/4 cents higher, or 0.3 per cent, at $9.04-1/4 a bushel.
Traders are waiting for the U.S. Department of Agriculture (USDA) to release updated acreage estimates for grains next month, after the June acreage report was considered to be an overestimate of how much corn was planted.
“We’re probably going to chop sideways until the August 12th numbers come out,” said Chris Manns, managing director for Traders Group.
The USDA on Monday released a weekly crop progress report that raised the good to excellent rating for corn by 1 percentage point to 58 per cent. Analysts expected it to stay unchanged.
The rating for spring wheat declined 3 percentage points to 73 per cent, which is below analyst expectations of an unchanged rating.
Soybeans were unchanged, at 54 per cent good to excellent condition, on par with analysts estimates.
For corn, threats to production remain as forecasts indicated hot and dry weather could return to the U.S. Midwest in the weeks ahead, particularly in parts of producing states Illinois and Indiana, Commodity Weather Group said.
“We’re going to need some rain at some point,” said Manns. “Every time a tractor moves in the fields, a cloud of dust follows it.”
Agricultural markets are also eyeing progress in U.S.-China trade talks. The year-long trade war between the world’s two largest economies has weighed on U.S. soybean prices.
U.S. and Chinese trade negotiators are in Shanghai this week for their first in-person talks since a G20 summit last month, as the two sides struggle to resolve deep differences on how to end the dispute.
China approved wheat imports from the Russian region of Kurgan and soybean imports from all parts of Russia, officials said, having all but halted U.S. soy imports as the trade dispute deepened.
China was the top buyer of U.S. soybeans until Beijing slapped a 25 per cent tariff on shipments last year in response to U.S. tariffs on a range of Chinese products.
– Additional reporting by Naveen Thukral.