U.S. Wheat Futures Rise 4% on Lower Supply Forecast and Trade Corridor Doubts

U.S. wheat futures rose around 4% on Monday, buoyed by official forecasts of lower-than-expectations for U.S. supply for next season and doubts over the renewal of a trade corridor agreement. shipping from Ukraine before the deadline set this week.

Corn and soybean futures also advanced, supported by strength in wheat and crude oil, a weaker dollar and concerns over the extent of Argentina’s drought-hit crops.

The Chicago Board of Trade (CBOT) July wheat contract settled up 25-3/4 cents at $6.60-3/4 a bushel. The KC July wheat contract, which represents the class of wheat grown in the drought-stricken U.S. plains, finished up 21-1/4 cents at $8.98-1/4 a bushel, after trading hit $9.12-1/4, its highest level in almost six months.

CBOT July Corn gained 6-1/4 cents to $5.92-1/2 a bushel and July Soybeans ended up 10-3/4 cents at $14.00-3/4 the bushel.

Wheat climbed on fears of tighter supplies after the US Department of Agriculture’s first official forecast for US wheat production for 2023-24 was released Friday at 1.659 billion bushels. , were lower than most analysts’ expectations. The harvest of hard red winter wheat in the drought-stricken plains would be the lowest since 1957.

The USDA report “was somewhat bullish for wheat prices given the expected sharp decline in US carry-out stocks for 2023/24,” ING Economics said in a note.

“However, developments related to the Black Sea Grains Agreement will also be crucial for the direction of prices.

UN aid official says efforts will continue in coming days to expand deal allowing safe export of Ukrainian grain to Black Sea, a pact Russia has threatened to quit on May 18 due to obstacles to its grain and fertilizer exports.

Gains in corn and soybean futures markets were limited after the USDA on Friday forecast a sharp rise in corn and soybean stocks year-over-year on expectations of record crops in the United States. United States for these two cultures. However, crop prospects will depend on weather conditions in the Midwest over the coming months.

After Monday’s market close, the USDA

said

US corn crops were 65% planted and soybean plantings were 49% complete, slightly behind trade forecasts.

business expectations

but still ahead of their respective five-year averages. (Additional information provided by Gus Trompiz in Paris and Naveen Thukral in Singapore; edits by Emelia Sithole-Matarise and David Gregorio)