Chicago wheat futures edged lower on Thursday, as hopes for strong U.S. yields took the edge off worries about crop losses in top exporter Russia, which had driven prices to 10-month highs this week.
The most-active wheat contract on the Chicago Board of Trade (CBOT) fell 0.2% to $6.64-3/4 per bushel, after reaching as high as $6.97 per bushel in volatile trading on Wednesday.
While Russia’s consultancy Sovecon has cut its forecast for Russia’s 2024 wheat harvest to 85.7 million metric tons from 93 million tons due to dry weather and frosts, analysts believe this downgrade may be too large and that the recent price rally has gone too far.
“In the near term, there’s plenty of grain,” said Ole Houe at IKON Commodities in Sydney. “I think we will see more downside in the next 3-4 days.”
Supporting this view, the first results of the Wheat Quality Council’s tour in Kansas projected an average yield in the northern part of the state of 49.9 bushels per acre for hard red winter wheat, the highest in three years. Yields in southwestern Kansas were also projected to be higher at 42.4 bushels per acre, up from a drought-reduced 27.6 in 2023.
Soybean futures inched up 0.2% to $12.15-1/2 per bushel, as concerns over flooding in Brazil offset data showing lower demand for beans from U.S. soy processors. Corn also rose slightly by 0.1% to $4.62-3/4 per bushel, despite forecasts of drier weather in the U.S. Midwest that is favorable for planting.
Commodity funds were net sellers of CBOT wheat, corn and soybeans on Wednesday, but speculators have sharply reduced their net short positions in all three markets in recent weeks, helping to lift prices from their 2023 lows.