Wheat pauses after 15-month low as focus turns to U.S. data

Chicago wheat futures were little changed on Wednesday, after a 15-month low in the previous session fuelled by negative export sentiment, as the focus shifted to upcoming U.S. government crop and inflation data.

Corn and soybeans edged higher as traders also assessed the possible impact of drought in major crop exporter Argentina.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.1% at $7.30 a bushel by 1240 GMT, after dropping to its lowest since October 2021 at $7.20-1/2 on Tuesday.

The contract was holding chart support after Tuesday’s slide, while the market awaited further direction from the U.S. Department of Agriculture’s (USDA) monthly world crop forecasts and quarterly U.S. grain stocks estimates on Thursday, traders said.

Wider financial markets were also steady as investors looked to U.S. inflation data on Thursday for further clues about interest rate policy.

However, wheat remained curbed by slow U.S. exports, competitive Black Sea prices as highlighted by Egypt’s reported purchase of Russian wheat on Tuesday, and improving global supply prospects, with India expected to follow Australia in harvesting a record crop.

“Demand for U.S. wheat has been very poor,” commodities research firm Hightower said in a report. “Talk that Egypt booked Russia wheat in their tender added to the negative tone.”

CBOT corn was up 0.4% at $6.57-3/4 a bushel, recovering from a three-week low touched on Tuesday, while soybeans gained 0.5% to $14.93 a bushel.

The USDA is expected to cut its corn and soy production outlook for drought-hit Argentina, but also raise its estimate of U.S. grain and soybean supplies.

Drought in Argentina is likely to break in coming months, the Buenos Aires Grain Exchange said on Tuesday.

There was also market chatter of Argentine buyers booking Brazilian soybeans to supply oilseed processing facilities. Argentina is the world’s largest exporter of soymeal and soyoil obtained from crushing soybeans.

Large supplies and mostly favourable growing weather in Brazil have helped counter Argentine crop concerns in recent months.

Brazilian exporter group Anec on Tuesday said Brazil has booked shipments of more than 1 million tonnes of corn to China in January, putting the country on course to export a record overall volume this month.

Tags: soybeans, wheat, crop, Black Sea, U.S., futures, Market, Russia, Argentina, corn, Brazil, prices