Chicago wheat futures took a breather on Monday as traders locked in profits after prices climbed to nine-month highs last week over concerns that bad weather conditions are damaging crops in top exporter Russia.
Soybean and corn futures also edged lower despite worries about supply from South America.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.1% at $6.56-1/4 a bushel, as of 0105 GMT. CBOT soybeans fell 0.5% to $12.12-3/4 a bushel and corn slipped 0.4% to $4.67-3/4 a bushel.
Wheat rose to $6.65 on Friday, its highest level since last August. Record shipments from top exporter Russia had pushed prices to $5.24 in March, the lowest since 2020, but dry and then cold weather in Russia has damaged crops.
The weather conditions pushed prices higher and forced speculators to abandon bearish bets.
Three of Russia’s key grain-growing areas declared a state of emergency due to May frosts. Authorities have said farmers in some areas will need to re-sow crops and consultants Sovecon downgraded their forecast for the 2024 wheat crop to 89.6 million metric tons from 93 million tons.
Parts of the U.S. wheat belt have also suffered dry weather, and the U.S. Department of Agriculture said on Friday that U.S. wheat ending stocks for 2024/25 would be 766 million bushels, well below analysts’ estimates for 786 million.
The USDA projected global wheat ending stocks at 253.61 million tons, below analysts’ estimates for 257.37 million tons.
In France, meanwhile, the condition of the country’s main wheat crop improved slightly last week but was still its weakest in four years, farm office FranceAgriMer said.
Soybeans and corn have also suffered supply shocks. CBOT futures for both contracts fell in February to their lowest since 2020 amid ample supply, but corn has since risen around 15% and soybeans around 7.5%.
Floods in Brazil have knocked millions of tons off the country’s soybean harvest, and strikes at grain ports and crushing plants in Argentina are impacting shipments.
However, U.S. farmers are expected to produce their second-biggest soybean harvest this year, raising record-large global inventories by more than analysts had expected, the USDA said.
The USDA also said U.S. soybean-ending stocks for 2024/25 would be at a five-year high of 445 million bushels, topping analysts’ estimates for 431 million.
In corn, the USDA projected U.S. corn stocks for 2024/25 at 2.102 billion bushels, a six-year high but below analyst expectations. Weather has hampered corn planting in the U.S. Midwest.
A leafhopper insect outbreak has meanwhile caused $2.045 billion in losses to Argentina’s corn crop, the Rosario grains exchange said, after cutting its harvest estimate to 47.5 million tons from 59 million tons at the start of the season.
On the demand side, China’s agriculture ministry cut its forecasts for imports of corn and soybeans in the 2024/25 crop year.
Speculators sharply reduced their net short positions in CBOT corn, soybeans and wheat in the week ended May 7, and traders said they were net buyers again on Friday.
A rally in global equity markets lifted stocks in Europe to record highs on Friday amid strong corporate earnings and hopes central bank interest rate cuts are near, while the dollar edged higher.
