Chicago wheat prices hit new nine-month highs on Monday due to concerns that frosts could damage crops in top exporter Russia. However, the prices fell back later in the session on selling pressure as rain was forecast in the dry Russian grain belts.
The most-active wheat contract on the Chicago Board of Trade (CBOT) initially rose to $6.72 per bushel, its highest level since August 2022, before ending the day 0.1% lower at $6.62-1/2 per bushel.
Traders were focused on the potential loss from the frosts that hit the south Russian grain belts over the weekend. However, the forecast for some welcome rain in the coming days in southern Russia and other parts of the Black Sea region put pressure on prices.
“Wheat remains higher in early trade, the market still focused on defining the loss from the frost seen in Russia,” said Matt Ammermann, commodity risk manager at StoneX. “But Mother Nature is also being watched with further welcome rain forecast in coming days in south Russia and elsewhere in the Black Sea.”
The Russian agricultural consultancy IKAR has already cut its Russian wheat crop forecast to 86 million metric tons from 91 million tons due to the frost damage.
Soybeans and corn also fell, with soybeans down 0.3% to $12.15 per bushel and corn down 0.4% to $4.67-1/2 per bushel. These declines were driven by the U.S. Department of Agriculture’s (USDA) forecast on Friday of large soybean and corn crops, indicating plentiful U.S. supplies.
“Corn and soybeans are lower following the USDA’s forecast on Friday of overall plentiful U.S. supplies,” Ammermann said.
The market remains focused on the weather and its impact on the Russian wheat crop, with traders waiting for more clarity on the extent of the potential damage.