CANBERRA: Chicago wheat futures fell to their lowest levels since April on Monday, influenced by a stronger dollar and an improved supply outlook due to increased harvest activities in the United States and other regions. The supply influx from ongoing harvests is introducing more grain into the market, contributing to the price decline.
Fourth Consecutive Weekly Decline for Wheat
Wheat is on track for its fourth consecutive weekly loss as supply prospects continue to brighten. Corn futures experienced a slight dip, while soybeans remained largely stable.
Market Fundamentals
By early Monday (0051 GMT), the most active wheat contract on the Chicago Board of Trade (CBOT) had decreased by 0.4%, trading at $5.73-1/2 per bushel. This represents its lowest point since April 22. CBOT corn futures dropped by 0.3% to $4.33-3/4 per bushel, while soybeans remained nearly unchanged at $11.20-1/2 per bushel.
Last month, wheat prices surged to a 10-month high of $7.20 due to downgrades in Russia’s harvest outlook. However, improved weather conditions in Russia have led to an upward revision of harvest forecasts by consultancy IKAR. The Russian agriculture minister also noted that frost damage was minimal, with affected areas successfully reseeded.
In other major wheat-producing regions like Australia and Canada, weather conditions have similarly improved. The U.S. wheat harvest is progressing swiftly, and Ukrainian farmers have commenced crop harvesting.
Impact of a Stronger Dollar
The U.S. dollar has risen to its highest level since early May, making U.S. agricultural products more expensive for international buyers using other currencies.
In France, the condition of the main wheat crop remained unchanged for the second consecutive week, although the overall harvest is expected to decrease significantly this summer following a wet growing season.
According to the U.S. Department of Agriculture, wheat export sales for the week ending June 13 exceeded market expectations, whereas corn sales fell short.
Corn Production Concerns in China
Record high temperatures in northwest and eastern China are threatening to reduce corn production in the world’s second-largest producer and consumer of the grain.
On Friday, commodity funds were net sellers of CBOT corn and wheat futures but net buyers of soybeans, indicating varied trader sentiment across different commodities.
