Chicago Wheat Futures Fall on Weak Demand and Lower Russian Prices
London/Canberra, Feb 1 – Chicago wheat futures declined on Thursday due to weak demand and falling export prices in Russia. Alongside wheat, soybeans and corn also experienced losses and hovered just above multi-year lows as the market anticipated an ample supply.
At 1231 GMT, the most-active wheat contract on the Chicago Board of Trade (CBOT) dropped 1.2% to $5.88-1/4 a bushel. These prices have fallen by 5.2% in January and are now not far from the three-year low of $5.40 that was reached in September last year.
CBOT soybeans encountered a 1.1% decrease, settling at $12.09-1/4 a bushel, close to the two-year low of $11.88 seen on Tuesday. Similarly, corn slipped by 1%, reaching $4.43-1/2 a bushel, near the three-year low of $4.37 that was hit twice in January.
Stefan Vogel, an expert at Rabobank in Sydney, stated, Grain prices are likely to remain under pressure, as markets globally and locally battle with a supply outlook for 2024 that is more plentiful than in past years. For significant 2024 price upside for grain, the world would need to see weather-related supply shortages arise.
The focus of the wheat market has been on Black Sea supplies due to the decreasing wheat prices in Russia, which still has a significant surplus to address before the upcoming harvest in the summer. Russia’s agriculture minister has also announced plans to increase the area for the 2024 harvest by 300,000 hectares to 84.5 million hectares, further reinforcing expectations for another bumper crop.
Paris wheat futures experienced a decline as well, with March falling by 1.3% to 208 euros ($224.89) a metric ton. It had set a contract low of 207.50 euros.
EU wheat prices have been impacted by sluggish demand and competition from Russia, resulting in widespread protests throughout Europe over low prices. Farmers expressed their discontent by throwing eggs and stones at the European Parliament building, setting fires, and launching fireworks in an attempt to pressure EU leaders into providing more assistance with taxes and rising costs.
Concerns about Chinese demand for agricultural imports were not alleviated when data showed a fourth consecutive monthly decline in China’s manufacturing activity.
($1 = 0.9249 euros) (Reporting by Peter Hobson in Canberra and Nigel Hunt in London; Editing by Sherry Jacob-Phillips, Rashmi Aich, and David Evans)
