GRAINS-WHEAT SUBDUED AFTER WEATHER RALLY, FOCUS TURNS TO USDA DATA
Category: Grains
(Agriculture.com) – Chicago wheat eased on Monday as rainfall in western Australia took the edge off global weather worries, while investors awaited a U.S. government crop report to gauge the possible impact of dryness in a clutch of exporting countries.
Soybeans and corn also ticked lower to hold near multi-month lows struck in the previous session, curbed by favourable growing conditions in the U.S. Midwest and lingering concerns about tensions between Washington and major trading partners like China and Mexico.
The Chicago Board of Trade most-active wheat contract was down 0.2 percent at $5.18-3/4 a bushel by 1146 GMT.
The contract earlier bounced from Friday’s fall, before turning slightly lower.
Wheat prices have been buffet in recent weeks by concern over dry weather in several major exporting countries, which could change the complexion of a global market currently laden with record inventories.
“News flow is supportive for wheat prices, we have a severe drought cutting Russian output,” said one India-based agricultural commodities analyst.
“But the upside might be limited as stocks are still pretty big in the United States and fresh supplies from the northern hemisphere harvest have started coming to the market.”
Traders will get an update on U.S. winter wheat harvest progress and crop conditions later on Monday in a weekly U.S. Department of Agriculture (USDA) report, ahead of the agency’s widely followed world crop forecasts on Tuesday.
Farmers in Australia’s export-focused west received beneficial rain at the end of the winter wheat planting window, although conditions remain parched in the eastern states.
Conditions remain parched in parts of the Black Sea export region.
“Hot and dry weather looks to stay over the Black Sea region this week, further drawing yield potential for Ukraine wheat and corn, and Russia wheat,” Thomson Reuters Agriculture Research analysts said in a note.
Severe drought in eastern and southern regions could shrink Ukraine’s 2018 wheat harvest by 15-30 percent versus original forecasts, the state hydrometeorological centre said on Friday.
Russian agriculture consultancy IKAR said on Friday it had downgraded its forecast for Russia’s 2018 wheat crop to 71.5 million tonnes from 73.5 million previously.
Soybeans inched down 0.1 percent to $9.68-1/4 a bushel, near Friday’s low of $9.62-1/2, a level not seen since mid-January.
Corn eased 0.4 percent to $3.76-1/4 a bushel, close to Friday’s two-month low of $3.73-1/2.
Traders will be watching the USDA’s weekly crop progress report later in the day to see if corn and soybean crops remain in good condition after a favourable start to the growing season.
