Chicago wheat prices bounced back on Wednesday, recovering from a more than two-month low, as bargain-buying supported the market. However, pressure from the ongoing U.S. harvest and improved weather in Russia are likely to limit the upside.
The most-active wheat contract on the Chicago Board of Trade (CBOT) added 0.2% to $5.61-3/4 a bushel, as of 1015 GMT. The contract had earlier hit its lowest level since April 19 at $5.56-3/4 a bushel.
“The wheat market has sold off heavily because of U.S. harvest pressure,” said a Singapore-based grains trader. “But we might be close to the bottom.”
Corn and soybeans also gained ground as the market assessed the impact of floods in the U.S. Midwest. Corn rose 0.3% to $4.43-1/2 a bushel, while soybeans gained 0.6% to $11.14-1/2 a bushel.
The wheat market has dropped this week as the rapidly advancing U.S. harvest shows good yields. There has been additional pressure as crops stabilized with improved weather in Russia after weeks of droughts and frost.
More flooding hit parts of the U.S. Midwest corn and soybeans areas on Tuesday, but some traders are assuming that the additional moisture will ultimately be beneficial for crops.
A heatwave forecast to spread throughout Europe this week is set to take a heavy toll on summer crops in the southeast, but it is good news for farmers on the other side of the region after prolonged rains flooded fields and hampered plants’ growth, analysts said.
Commodity funds were net sellers of CBOT corn, wheat, soybeans, soymeal and soyoil futures contracts on Tuesday, traders said.