USA – Futures for Chicago Board of Trade wheat and corn weaken following U.S. Department of Agriculture forecast that indicated tightening global supplies.
USDA’s World Agricultural Supply and Demand Estimates for May reflect “an increasingly tense context linked to the double effect of climatic hazards and tensions on the Black Sea,” said consulting firm Agritel.
Traders took some profits ahead of the weekend and on expectations that U.S. farmers are advancing corn plantings thanks to improved Midwest crop weather, analysts said.
Many parts of Kansas, the nation’s largest wheat producer at 364 million bushels last year per USDA data, received significant rainfall since May 1, which helped the crop.
However, this was followed by intense heat, as temperatures soared above 90 degrees Fahrenheit, which can limit production as plants race to the finish line.
Analysts added that markets remain nervous about tightened grain supplies owing to global crop shortfalls and Russia’s invasion of Ukraine, a major wheat and corn exporter.
The USDA ignited a rally in wheat futures by projecting a six-year low for world stocks next season in May’s report of World Agricultural Supply and Demand Estimates.
The most-active Chicago Board of Trade soft red winter wheat contract ended down 1-1/4 cents at $11.77-1/2 a bushel after having hit a two-month peak.
Hard red winter wheat and spring wheat futures extended gains and set new highs in the July contracts.
Traders were surprised by a lower-than-expected 2022/23 production estimate for U.S. hard red winter wheat, which suffered heat damage.
Analysts said hot weather could continue to trim the U.S. hard red winter wheat harvest, while rains have delayed spring wheat plantings in the northern U.S. Plains.
With harvest only weeks away, USDA projects production will be 21% less than last year at 590 million bushels due to widespread drought in the Great Plains.
Total winter wheat production is forecast at 1.17 billion bushels, down 8% from 2021. yields are placed at 47.9 bushels per acre (bpa), down 2.3 bpa from last year’s average.
Most-active CBOT corn closed 10-1/4 cents lower at $7.81-1/4 a bushel, while soybeans finished up 32-3/4 cents at $16.46-1/2 a bushel.
Strength in crude oil and equities, along with hopes for increased U.S. export demand to China, helped lift soy futures, analysts said.
The USDA reported sales of 132,000 tons of U.S. old-crop soybeans to China, the world’s top importer of the oilseed.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE