Wheat Dips As Ample Supply Stifles Rally

Chicago wheat futures slipped on Tuesday, ending a run of four consecutive daily gains triggered by poor production in Europe, as concerns over ample global supply reasserted themselves to hold prices near their lowest since 2020.

Soybeans and corn futures also dipped after signs of improving demand drove price gains last week.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was down 0.3% at $5.49-3/4 a bushel at 0434 GMT and not far from July’s four-year low of $5.14.

Crop setbacks in the European Union, including the worst French wheat harvest since the 1980s, helped lift prices 4.5% last week, but prospects elsewhere are good.

“Higher projected wheat production is expected for Canada, Argentina, Australia and the United States and should more than offset reduced expected production for the Russian Federation, the European Union, and Ukraine,” the Australian agriculture ministry said in a report.

In the same report, the ministry raised its official forecast for Australia’s wheat output by 2.7 million metric tons.

Northern hemisphere harvests have been pouring new supply onto the market in recent months but are now winding down, which should reduce pressure on the market, said Commonwealth Bank analyst Dennis Voznesenski.

“We’re forecasting prices to be supported as we move towards the end of the year and into 2025,” he said.

In other crops, CBOT corn Cv1 fell 0.2% to $4.00-1/4 a bushel and soybeans Sv1 slipped 0.2% to $9.98-1/2 a bushel. Both are also near four-year lows with supply expected to be plentiful.

Export sales of U.S. corn and soybean for the week ended Aug. 22 came in above analyst expectations.

The Argentine corn planting area in the 2024/25 season is estimated to drop 17.1% year-on-year due to fears of leafhopper pest proliferation and possible droughts, the Buenos Aires Grain Exchange (BdeC) said, although rainfall in recent days should boost crops that are planted.

Tags: prices, soybeans, wheat, sales, futures, corn