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Wheat Prices Fall, Focus Turns to US and Russian Crops

April 24, 2024

Today in the agricultural commodities market, Chicago wheat recorded a drop on Wednesday, marking its first decline in five sessions. This pullback came after the grain hit a two-month peak in the prior session, demonstrating a slight correction after its recent upswing.

The most-active wheat contract on the Chicago Board of Trade (CBOT) decreased by 0.5% to $6.00 a bushel. This adjustment occurred following a rise to $6.03-1/2 a bushel on Tuesday, which was its highest value since mid-February.

Wheat Prices Respond to Russian Weather and U.S. Crop Ratings

Concurrently, corn prices saw a decline by 0.1% to $4.52-1/4 a bushel, and soybeans showed minimal movement, gaining just a quarter of a cent to settle at $11.82-1/4 a bushel. The recent dynamics in wheat prices have been influenced by several factors, such as the decline in U.S. crop ratings and adverse weather conditions affecting crop maturation in Russia.

Increased Concerns Over Global Wheat Supply

The latest U.S. Department of Agriculture’s (USDA) weekly crop progress report indicated that only 50% of the U.S. winter wheat crop was rated in good-to-excellent condition, a decrease from 55% the previous week and slightly lower than analysts’ expectations.

This reduction is primarily attributed to dry conditions impacting hard red winter wheat areas in Oklahoma and Kansas. Similarly, dry weather in southern Russia and a cold spell in western Europe have heightened concerns over global wheat supplies.

Furthermore, adjustments to wheat production forecasts have been made, with Argus Media revising its expectations for Ukraine’s wheat output downward to 19.93 million metric tons, reflecting a decrease of about 230,000 tons from previous estimates. This represents an 11% reduction compared to the previous year, linked to a smaller planted area.

US Corn Planting Matches Expectations, Soybeans Ahead of Schedule

In terms of planting progress, the U.S. is experiencing somewhat favourable conditions for corn, with the USDA reporting 12% of the corn crop planted, aligning with analyst expectations. For soybeans, planting is slightly ahead of forecasts, with 8% completed compared to an anticipated 7%.

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