CANBERRA- Chicago wheat futures fell on Thursday, bringing their decline since hitting an eight-month high last week to around 7 percent, as it became evident that Northern Hemisphere winter crops had got through a period of cold weather without significant damage.
Corn and soybeans edged up, but were stuck below recent highs, with all three contracts under pressure from renewed fears that tariffs will ensnare agricultural trade and dampen global economic growth, reducing demand for grains and oilseeds.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.5 percent at $5.76-3/4 a bushel and retreated from a peak of $6.21-1/4 on February 19, its highest since last June.
Wheat surged to its recent highs due to rising corn prices and expectations of tighter Black Sea supply, but with grain still abundant for now and corn’s rally losing momentum, the upward trend has reversed.
Snow cover has protected wheat crops in the United States and Russia from damage from frosty conditions this month, analysts said.
The potential for peace between Russia and Ukraine is also weighing on wheat as it would reduce the risk of Black Sea export disruptions, Commonwealth Bank analyst Dennis Voznesenski said in a note.
Commodity funds who already held a net short position in CBOT wheat have been selling in recent days, traders said.
Prices are likely to be volatile in the coming months as estimates of northern hemisphere crop production firm up, said Rod Baker, an analyst at Australian Crop Forecasters.
Demand is relatively weak, he said, but “there’s still a bit of a bullish outlook. Black sea exports are dropping off, stocks are pretty tight, and it won’t take much of a production scare to rally prices again.”
In other crops, CBOT corn was up 0.1 percent at $4.93-3/4 a bushel and soybeans rose 0.3 percent to $10.44-3/4 a bushel.
