SINGAPORE- Chicago wheat futures rose more than 3 percent on Thursday with prices climbing for the first time in six sessions, supported by concerns over lower Black Sea supplies.
Corn and soybeans gained 2 percent.
“The wheat market is recovering but we have to really see if there is buying to support prices when the US sessions starts,” said one Singapore-based grains trader.
The most-active wheat contract on the Chicago Board of Trade (CBOT) added 3.4 percent to $8.31-3/4 a bushel, after dropping to its lowest since Feb. 17 at $7.85 a bushel on Wednesday.
Corn rose 2 percent to $5.96-3/4 a bushel and soybeans gained 2 percent at $13.49-3/4 a bushel.
Worries about wheat supplies from the Black Sea region continue to support prices as the new crop marketing year starts in July.
French consultancy Agritel expects war-hit Ukraine to harvest 21.8 million tonnes of wheat this summer compared to a record 32.2 million collected last year, it said on Wednesday.
The estimate for the 2022/23 season was based on an expected harvested area of 5.8 million hectares, down from 6.7 million hectares initially sown by farmers, said Agritel, which is part of commodity pricing group Argus.
For corn and soybeans, traders are also keeping an eye on US crop weather. The US Department of Agriculture, in a daily weather report, said rain showers and thunderstorms from Nebraska to Ohio were greatly benefiting fields.
The agency, in a separate weekly report issued on Tuesday, rated 64 percent of the corn crop as good to excellent as of Sunday, down 3 percentage points from the previous week.
Analysts surveyed by Reuters on average had expected a two-point decline.
Commodity funds were net sellers of CBOT wheat and soyoil futures contracts on Wednesday, and net buyers of corn, soybeans and soymeal futures, traders said.
Despite a late start, the US corn crop began the growing season in strong health, though that has since declined after several weeks of dry and sometimes hot weather.
That does not necessarily mean analysts need to make drastic cuts to their yield assumptions, though they might need to start considering if rains forecast for this week are underwhelming.
The US Department of Agriculture’s statistics service on Tuesday afternoon pegged 64 percent of the corn crop as having good or excellent health as of Sunday, down from 67 percent last week, below the trade prediction of 65 percent and identical to the year-ago score.
That represents a decline of 9 percentage points since the initial score four weeks earlier.
Similarly quick downturns in corn conditions are rare this early, though one happened during the same weeks in 2021, making it only the third instance in nearly three decades (2012 and 1998 were the others).
Last year, corn yield was dragged down by historic drought in the Dakotas and northwest Minnesota, though a new national record of 177 bushels per acre (bpa) was eventually realized as top-producing states like Iowa, Nebraska, Indiana and Ohio hit new highs.
That was below USDA’s initial 2021 trend of 179.5 bpa and it was not above a separately calculated longer-term trend, so it was considered an average crop in context. USDA’s 2022 trend of 177 bpa would also be a decent though not excellent crop, and it is still in the cards based on the conditions.
Crop conditions are not great at quantitative yield predictions, but they do well at the extremes: The lowest conditions produced the worst yields and vice versa. The middle is a gray area, but this year’s ratings, in the lower half of mid-range, do not precede stellar corn crops.
However, average crops have frequently resulted both when ratings have declined into July and when condition scores are in the low-to-mid-60s.
It should not be shocking if corn conditions do not improve much from here based on seasonal trends. Good-to-excellent conditions during July have risen by at least 2 percentage points in only four of the last 30 years, most recently in 2008. — Reuters
