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Chicago wheat set for biggest weekly gain in a month on global crop concerns 

May 24, 2024

Key points: 

  • Chicago wheat prices rose 0.4% to $7.01 a bushel, marking a 7.6% weekly gain. 
  • Corn futures increased by 0.3% to $4.65-1/4 a bushel, while soybeans fell 0.1% to $12.38-1/4 a bushel. 

Chicago wheat prices gained more ground on Friday, poised for their largest weekly rise in a month, driven by concerns over crop losses in the Black Sea region and other key exporting countries. The most-active wheat contract on the Chicago Board of Trade (CBOT) rose 0.4% to $7.01 a bushel, taking the weekly rise in prices to 7.6%. 

Chart displaying Chicago wheat prices at 6.890 with a trend of 0.29%, reflecting the biggest weekly gain in a month due to global crop concerns. The chart features moving averages (MA) and MACD indicators. Lower forecasts for wheat production from Russia, combined with adverse weather conditions in major producers like Ukraine, Australia, France, and Germany, have pushed wheat prices to their highest in 10 months. Image hosted by VT Markets, a forex CFDs brokerage.

Image above shows the rally in wheat prices, as observed on the VT Markets app

Weather disruption hinders wheat production 

Lower forecasts for wheat production from Russia have fueled this rally, pushing wheat prices to their highest in 10 months. Adverse weather conditions in major producers like Ukraine, Australia, France and Germany have also contributed to the price increase.

The International Grains Council recently cut its forecast for 2024/25 global wheat production by 3 million metric tons to 795 million tons, citing downgraded outlooks for key Black Sea producers Russia and Ukraine. 

Wheat crop in Germany is expected to shrink by 5.6% this year to 20.31 million metric tons, according to its association of farm cooperatives. This continues the trend of reduced crop forecasts across major wheat-producing regions. 

Related commodities 

Corn futures were supported by doubts over South American production. Corn on the CBOT added 0.3% to $4.65-1/4 a bushel, with a weekly gain of 2.7%. Soybeans, on the other hand, edged lower by 0.1% to $12.38-1/4 a bushel, with a marginal weekly rise. 

In Brazil, the southernmost state saw soybean farmers harvesting 91% of their soy area, up from 85% last week, despite rain and flooding disruptions. This slow pace has influenced soybean market dynamics. 

What commodity traders should look out for 

Wheat prices may continue to rise if adverse weather conditions persist in major producing regions. Market participants should watch for updates on crop forecasts from the International Grains Council and other agricultural bodies. 

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