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Chicago wheat recovers from 4-month low on short-covering, bargain hunting

Chicago wheat futures rose on Tuesday, supported by short-covering and bargain hunting after falling to a four-month low in the previous session as ongoing winter harvest was ahead of expectations.

Corn and soybeans both edged up.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 rose 1.58% to $9.32 a bushel. The market fell to its lowest since February on Monday, pressured by the expanding harvest of winter wheat in the Northern Hemisphere and a lack of demand for U.S. supplies.

Corn Cv1 climbed 1% to $6.59-1/2 a bushel and soybeans Sv1 edged up 0.87% to $14.45-1/4 a bushel.

“Wheat harvest in the northern hemisphere and positive expectation on clearing grains passage from the Black Sea region,” were the main things currently underlining the CBOT wheat prices, a China-based trader said.

“Prices dropped yesterday and buyers went in,” said the trader, explaining the rise on Tuesday.

The market remained positive about the prospect of getting grains shipped out of the Black Sea Region as the global community held talks and expressed willingness to facilitate clearing the exporting passage, after the Russia-Ukraine war blocked trade.

“If the negotiations went well, (grains) prices will keep falling. Otherwise, they would fluctuate at high levels,” another Chinese trader said.

The U.S. Department of Agriculture (USDA) cut its rating of the country’s corn crop in good-to-excellent shape to 67% in its weekly crop progress report, down 3 percentage points from a week ago. Its U.S. soybean crop rating also fell by 3 percentage points to 65% good to excellent, according to the report.

Traders were also waiting for more USDA reports to be released this Thursday, on grains June acreage and quarterly stocks.

The U.S. Food and Drug Administration concluded a review of Argentine biotechnology firm Bioceres’ BIOX.BA genetically modified (GMO) wheat without further questions, a “key step” to commercializing it in the United States, the company said on Monday.

The USDA said the U.S. winter wheat harvest was 41% complete, more than trade expectations and ahead of the five-year average of 35%.

Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), announced on Monday that it is seeking an unspecified amount of wheat in an international tender.

Commodity funds were net sellers of Chicago Board of Trade corn and wheat futures contracts on Monday, and net buyers of soybean, soymeal and soyoil futures, traders said. C

U.S. stocks ended a volatile trading session slightly lower on Monday after posting sharp gains the week before, while oil prices and Treasury yields rose.
Source: Reuters (Reporting by Hallie Gu and Dominique Patton; Editing by Rashmi Aich)

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