Wheat market recovers marking a strong start to 2024

Chicago wheat futures for May-24 rallied 3.1% in Chicago which helped London feed wheat for May-24 recover into positive territory after an early foray below £160 /t. Paris milling wheat for May-24 at one point came back within €1 /t of the much-watched €200 /t mark.

Aside from bargain buying interest, the catalyst for the rebound was unclear, after prices earlier headed lower again, continuing to feel pressure from strong competition among exporters for orders, at a time of ample Russian offers.

However, some international business was recorded on the day, with Jordan buying a reported 50Kt of wheat, and Japan issuing a tender too.

The EU Commission also reported EU export data which suggested a stronger start to 2024 than previously reported. The commission, which has struggled collating data for its weekly trade reports, revised its figure for EU soft wheat exports up by 1.2 million t to 19.9 million t.

As CRM Agri pointed out in its Grain Market Outlook, export prices have not felt the same degree of pressure as futures markets, in which managed money has built its largest net short position since 2019, and having become oversold vs cash market counterparts.

The extent of the rebound in Chicago, which was on course for what would be its strongest session in three months, reflected profit-taking by funds on some of their short positions.

Chicago corn prices staged a less marked rebound, having outperformed wheat over the past week to cut its premium to wheat below US$1.25/Bu for the first time in two months and on more bearish fundamentals.

US export news offered support, with shipments last week, at 918 600 t, up by 26 300 t from the previous week, and well ahead of the 623 800 t figure for the same in 2023. Furthermore, the US Department of Agriculture (USDA) announced the sale of 155 000 t of US corn to Japan for next season.

The USDA also unveiled, for this season, the sale of 228 000 t of US soymeal to the Philippines, offering support to Chicago soymeal prices, and in turn to futures in soybeans themselves, which extended their recovery from three-year lows set previously.

Tags: prices, soybeans, Grains, wheat, futures, soymeal, soft wheat, exports, corn, EU