Wheat up for third session on Russia crop worries
Chicago wheat rose for a third consecutive session on Thursday to its highest in more than a week, as concerns over downgrades in the outlook for Russian grain crops pushed prices higher.
Corn edged higher after closing lower, although concerns over lower demand for grain-based fuel ethanol kept a lid on prices.
“Wheat seems to be getting bit of a support from downgrades in Russian crop outlook, but supplies are still ample given the lower demand due to the coronavirus,” said Ole Houe, director of advisory services at brokerage IKON Commodities.
“We have not dealt with demand destruction yet.”
The most-active wheat contract on the Chicago Board of Trade rose 0.6% to $5.17 a bushel by 0252 GMT, having climbed to its highest since May 11 at $5.18-1/2 a bushel earlier in the session.
Corn was up 0.1% at $3.19-3/4 a bushel, having closed down 0.5% in the previous session and soybeans dipped 0.1% at $8.46 a bushel, having firmed 0.5% on Wednesday.
Rains across Europe offer hope for drought stricken crops, but dry weather persists across the Black Sea region.
Russia will harvest about 120 million tonnes of grain in 2020, slightly less than in 2019 as yields are going to decline in several southern regions of the country, Agriculture Minister Dmitry Patrushev said on Wednesday.
The government had previously expected grain crop to total 125.3 million tonnes.
Russia and Ukraine – major exporters of wheat from the Black Sea region – were hit by dry weather in April, though May rain fixed most of the damage for the upcoming crop.
A decline in the U.S. winter wheat crop ratings last week and lower-than-expected crop outlook during a Kansas wheat tour this week also buoyed the market.
U.S. farmers have made faster-than-normal progress in planting what is expected to be a huge corn acreage this year.
Commodity funds were net buyers of CBOT wheat, soybean, soyoil and soymeal contracts on Wednesday, traders said. They were net sellers of corn contracts.
Source: Reuters (Reporting by Naveen Thukral; Editing by Shounak Dasgupta)