As the trading week closes, Chicago wheat futures are on track to record their largest weekly uptick since 2021, fuelled by persistent dry conditions in key wheat-growing areas of Russia and the United States. These adverse weather patterns are stoking fears of a tightened supply landscape.
Corn and soybeans also saw upward movements. Corn is nearing its most dominant weekly rise in nine months, while soybeans are experiencing their first weekly increase after a month-long downtrend.
SEE: Wheat prices see significant gains on VT Markets trading app.
The most actively traded wheat contract on the Chicago Board of Trade (CBOT) dipped slightly by 0.1% to $6.19-3/4 a bushel early in the trading day. In contrast, corn prices ticked up by 0.1% to $4.52-1/4 per bushel, and soybeans advanced marginally by a quarter of a cent to $11.80-1/4 per bushel.
Dry conditions in certain regions of Russia and the U.S., major wheat producers have heightened market sensitivity to spring weather developments, prompting traders to reassess their positions. While southern Russia is expected to see scant rainfall until early May, forecasts indicate potential moisture relief for the U.S. Plains within the week.
For the week, wheat has surged by 9.3%, marking its steepest increase since March 2022. Corn has ascended by 4.3%, its most robust performance since July of the previous year, and soybeans have climbed by 1.1%.
The European Commission recently revised downward its forecast for the European Union’s main wheat crop for the 2024/25 season to the lowest point in four years, now expecting a significant reduction in planted area.
In terms of global supply adjustments, the European Commission has reduced its usable production forecast for common wheat to 120.2 million metric tons, down from last month’s prediction and marking the lowest since 2020.
The dry and hot conditions in northern Argentina could prompt the Buenos Aires grains exchange to lower its estimate for the 2023/24 soybean harvest, currently projected at 51 million metric tons.
Additionally, South African farmers are projected to harvest 18.5% less maize this season compared to the previous year, according to the government’s Crop Estimates Committee.
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