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Wheat futures dragged lower by positive supply outlook

Chicago Board of Trade (CBOT) wheat futures fell on Wednesday, as high crop ratings and favourable weather boosted hopes for U.S. yields and plentiful Russian supply diminished demand for U.S. exports.

Soybeans were little changed and corn rose slightly.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was down 0.6% at $5.42 a bushel by 0439 GMT.

CBOT soybeans Sv1 were flat at $11.73-1/2 a bushel and corn Cv1 climbed 0.3% to $4.27-3/4 a bushel.

All three contracts hit their lowest levels since 2020 in recent months amid ample supply, and speculators are betting prices will fall further.

“It’s hard to see a bullish picture for wheat,” said Commonwealth Bank analyst Dennis Voznesenski. “Farmers all around the world have a lot of grain on farm and we’re not even at mid-year harvest.”

He said prices were unlikely to rise unless dry weather lasted long enough to threaten crops in Russia or the United States, or shipments from the Black Sea were disrupted by the war between Russian and Ukraine.

The U.S. Department of Agriculture (USDA) on Monday rated the U.S. winter wheat crop at its highest early spring level in five years and crop-boosting rains are forecast for the southern U.S. Plains wheat belt.

Huge Russian wheat exports, which consultancy SovEcon estimates set a March record of 4.9 million tons last month, are weighing on the market. Russia expects another large wheat harvest this year.

News that a vessel loaded by TD RIF had left a Black Sea port in recent days eased concerns over that a dispute between the major export firm and Russian authorities could disrupt shipments.

Saudi Arabia bought 795,000 tons of wheat in a tender on Monday, which traders said would likely be sourced from the Black Sea region.

U.S. wheat exports in this marketing season are lagging the previous year’s pace.

A strengthening dollar has also made U.S. farm products more expensive for importers with other currencies.

The European Union’s soft wheat exports since the start of the 2023/24 season in July were 23.01 million tons by March 27, compared with 23.86 million tons a year earlier, EU data showed.

India has asked global and domestic trade houses to avoid buying new-season wheat from local farmers to help the government-backed Food Corporation of India (FCI) procure grain to shore up its depleting reserves, sources said.

Commodity funds were net sellers of Chicago wheat, soybeans and corn on Tuesday, traders said.
Source: Reuters (Reporting by Peter Hobson; Editing by Stephen Coates and Rashmi Aich)

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