Chicago | Reuters — U.S. wheat futures fell more than two per cent and corn and soybeans followed the weaker trend on Monday, as fears of a global economic downturn, a rising dollar and expectations of a bumper wheat crop in Russia weighed on commodity markets, analysts said.
Forecasts for favourably dry weather for the harvest in the U.S. Midwest added pressure.
“The economic forecast for the global economy is pretty poor. So, as a result we are seeing longs just getting out,” said Terry Linn, analyst with Chicago-based Linn and Associates. “Everybody is focused on the dollar,” Linn added.
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U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
Chicago Board of Trade December wheat settled down 22-1/2 cents at $8.58 a bushel (all figures US$). CBOT December corn ended down 10-1/2 cents at $6.66-1/4 a bushel and November soybeans fell 14-1/2 cents to end at $14.11-1/4 a bushel.
Along with macroeconomic woes, estimates of the wheat crop in Russia, the world’s top exporter, are rising. The European Union’s crop monitoring service MARS raised its projections for Russia’s 2022 wheat crop to a record-high 95 million tonnes, up from 88.8 million in June.
Russia’s Sovecon consultancy on Thursday raised its forecast for the crop to 100 million tonnes.
“The stronger dollar will be a burden to U.S. exports, especially at a time when a huge Russian wheat harvest is expected,” said Matt Ammermann, StoneX commodity risk manager.
“Corn and soybeans are also seeing weakness from forecasts of dry U.S. weather this week which will be positive for U.S. harvest work,” Ammermann said.
After the CBOT close, the U.S. Department of Agriculture said the U.S. corn harvest was 12 per cent complete as of Sunday, behind the average analyst estimate of 13 per cent and the five-year average of 14 per cent. The soybean harvest was eight per cent complete, lagging the average analyst estimate of 11 per cent and the five-year average of 13 per cent.
However, forecasts called for dry conditions this week that should boost field work.
Meanwhile, traders have begun adjusting positions ahead of Friday’s USDA quarterly grain stocks report, which has a history of jolting markets.
Dealers continue to monitor developments in the Russia-Ukraine war after increased tension last week. Some 211 ships with 4.7 million tonnes of agricultural products have left Ukraine so far under the deal to unblock Ukrainian sea ports, the Ukrainian infrastructure ministry said on Saturday.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.
