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U.S. grains: CBOT wheat stabilizes after rally as traders await U.S. crop data

Chicago | Reuters – Chicago Board of Trade wheat futures stabilized on Wednesday as traders adjusted positions ahead of a U.S. government crop report, a day after prices jumped on concerns about tightening global inventories.

The U.S. Department of Agriculture is set to issue an update on global grain supplies and demand in a monthly report on Thursday.

Lower yields in Russia’s winter wheat crop, drought damage to North American spring wheat and heavy rain during the European Union harvest have raised uncertainty about availability of export supplies.

Two leading agriculture consultancies in Russia, the world’s largest wheat exporter, cut their estimates for the country’s 2021 wheat crop due to dry, hot weather.

The USDA will likely “make major changes to its global wheat production estimate” to reflect a tightening of major exporters’ stocks, said Arlan Suderman, chief commodities economist for broker StoneX, in a note.

Traders on Thursday will also focus on changes to USDA’s monthly estimates for U.S. corn and soybean yields amid concerns about unfavorable dryness in certain growing areas.

The most-active CBOT wheat contract ended flat at $7.27 a bushel, following its 2.2% gain on Tuesday. CBOT soybeans rose 3-1/4 cents to $13.40 a bushel, and corn ended up 6 cents at $5.59-1/4.

“The market is continuing to adjust to substantially lower Russian wheat crop estimates,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Soybean futures rose for a second session on signs of accelerating export demand and spillover support from a jump in Malaysian palm oil futures, another key global oilseed market, analysts said.

The USDA, in a daily reporting system, said exporters sold 132,000 tonnes of U.S. soybeans for delivery to China during the 2021/2022 marketing year. It was the second consecutive day the agency confirmed U.S. soy sales to China, the world’s biggest importer of the oilseed.

– Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore

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