Chicago | Reuters — U.S. wheat futures rose about four per cent on Monday, supported by a lower-than-expected official forecast of U.S. supply next season and doubts over the renewal of a deal on the shipping corridor from Ukraine before a deadline this week.
Corn and soybean futures also advanced, supported by strength in wheat and crude oil, a softer dollar and worries about the size of Argentina’s drought-hit crops.
Chicago Board of Trade (CBOT) July wheat settled up 25-3/4 cents at $6.60-3/4 per bushel (all figures US$). The K.C. July wheat contract, representing the wheat class grown in the drought-hit U.S. Plains, ended up 21-1/4 cents at $8.98-1/4 a bushel after rising to $9.12-1/4, its highest in nearly six months.
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CBOT July corn settled up 6-1/4 cents at $5.92-1/2 a bushel and July soybeans finished up 10-3/4 cents at $14.00-3/4 a bushel.
Wheat climbed on fears of tightening supplies after the U.S. Department of Agriculture’s first official forecast of U.S. 2023-24 all-wheat production, released Friday at 1.659 billion bushels, fell below most analyst expectations. The harvest of hard red winter wheat in the drought-stricken Plains would be the smallest since 1957.
USDA’s report “was somewhat bullish for wheat prices given the large drop expected in U.S. ending stocks for 2023-24,” ING Economics said in a note.
“However, developments related to the Black Sea grain deal will also be crucial for price direction.”
The U.N.’s aid chief said efforts will continue in coming days to extend the deal allowing the safe Black Sea export of Ukraine grain, a pact Russia has threatened to quit on May 18 over obstacles to its grain and fertilizer exports.
Gains in corn and soybean futures were muted after USDA on Friday projected hefty year-on-year increases in corn and soybean supplies due to forecasts for record U.S. harvests of both crops. However, crop prospects will depend on Midwest weather in the coming months.
After Monday’s market close, USDA said the U.S. corn crop was 65 per cent planted and soybean planting was 49 per cent complete, both slightly behind trade expectations but still ahead of their respective five-year averages.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
