Ample supply pushes wheat lower despite poor French harvest
By Reuters
Chicago wheat futures fell on Monday, with Black Sea harvest maintaining expectations of plentiful global supply despite heavy rains that have cut production in France and Germany.
Soybean and corn futures rose after ample supply and selling by U.S. farmers drove prices to their lowest levels since 2020 last week.
FUNDAMENTALS
* The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.7% at $5.26-1/2 a bushel, as of 0044 GMT, and hovered near previous month’s four-year low of $5.14.
* CBOT corn rose 0.3% to $3.93-3/4 a bushel after hitting a four-year low of $3.90 earlier this month. Soybeans were up 1.2% at $9.68 a bushel after falling to a four-year low of $9.55 on Friday.
* French farmers have almost finished harvesting soft wheat and expect their smallest harvest since the 1980s due to heavy rains, FranceAgriMer data showed. The condition of France’s maize crop also declined.
* Heavy rains have also hit Germany’s 2024 wheat crop, which is likely to fall by 12.8% to 18.76 million metric tons, the country’s association of farm cooperatives said.
* However, plentiful supply from the Black Sea region is keeping pressure on prices.
* Ukraine has completed its 2024 wheat harvest, threshing 21.7 million metric tons of wheat, the agriculture ministry said, up from 21.6 million tons in 2023.
* The International Grains Council (IGC) last week trimmed its forecast for 2024/25 global wheat production, mainly due to a downgrade for French output, but said output would still be higher than in 2023/24.
* In soybeans and corn, U.S. farmers have been clearing out their grain bins ahead of a harvest that is forecast to see massive yields.
* Renewed concerns over China’s economy and weak Chinese demand for U.S. soy also weighed on CBOT futures, traders have said.
* Speculators are betting heavily on lower prices for Chicago wheat, corn and soybeans. Funds increased their short positions in all three crops in the week ended Aug. 13.
MARKETS NEWS
* Asian stocks were taking a breather after global equities enjoyed their best week in nine months on expectations the U.S. economy would dodge a recession and cooling inflation would kick off a cycle of interest rate cuts.
This article has been republished from The Mint.