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Chicago wheat hits new nine-month highs on Russian crop worry, then falls

Chicago wheat hit new nine-month highs on Monday on concern frosts could damage crops in top exporter Russia, but fell back on selling pressure with rain forecast in dry Russian grain belts.

Soybeans and corn fell, depressed by large U.S. supplies forecast by the U.S. Department of Agriculture on Friday.

Chicago Board of Trade most-active wheat Wv1 fell 0.1%, to $6.62-1/2 a bushel at 1034 GMT. Wheat earlier hit its highest since August at $6.72 a bushel, exceeding Friday’s previous nine-month high reached because of concerns about frosts and dry weather stressing Russia’s harvest.

Soybeans Sv1 fell 0.3%, to $12.15 a bushel, while corn Cv1 fell 0.4%, to $4.67-1/2 a bushel.

Frosts again hit south Russian grain belts over the weekend, traders said. But some welcome rain was forecast in south Russia, which produces wheat for export via Black Sea ports.

“Wheat remains higher in early trade, the market still focused on defining the loss from the frost seen in Russia,” said Matt Ammermann, StoneX commodity risk manager. “But Mother Nature is also being watched with further welcome rain forecast in coming days in south Russia and elsewhere in the Black Sea.”

“Eyes remain on Russian rains for rest of May. If no rains show up, traders may continue to buy. Perhaps the frost worst case is behind us, now the market wants some clarity about the extent of possible Russian crop damage.”

Three of Russia’s key grain-growing areas declared a state of emergency following frosts.

Russia’s IKAR agricultural consultancy cut its Russian wheat crop forecast to 86 million metric tons, from 91 million tons.

The USDA on Friday said U.S. farmers would harvest large soybean and corn crops, expecting large inventories.

“Corn and soybeans are lower following the USDA’s forecast on Friday of overall plentiful U.S. supplies,” Ammermann said.
Source: Reuters (Reporting by Michael Hogan in Hamburg, additional reporting by Peter Hobson in Canberra; Editing by Sherry Jacob-Phillips, Janane Venkatraman and Pooja Desai)

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