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Wheat rises ahead of USDA report as global grain tightness eyed
Chicago wheat futures jumped as much as 2.5% to the highest level since July 30 before trimming gains, as traders focus on expected declines in domestic and world supplies.
Wheat prices climbed as traders positioned for the US Department of Agriculture’s monthly supply and demand report due Wednesday, with expectations for declining domestic and global grain supplies. A Bloomberg survey cited by LiveMint Markets expects most classes of American wheat to show production declines in the USDA update, following dry conditions that hit crops after farmers had already reduced planting.
LiveMint Markets also pointed to pressure on global supplies beyond the US, with expectations that wheat and corn supplies could fall as the US corn yield edges downward. The report’s timing coincides with escalating attacks between Russia and Ukraine that raise worries about export disruptions from the Black Sea, a key shipping route for both countries.
According to LiveMint Markets, Russia and Ukraine together account for more than a quarter of world wheat shipments and about a tenth of corn, while attacks on grain infrastructure and vessels have renewed concerns over shipment reliability. Turkey temporarily halted Black Sea transits for its vessels over the weekend due to heightened security risks.
In futures trading, the most active Chicago wheat contract rose as much as 2.5% to its highest price since July 30 before paring gains. LiveMint Markets added that regulatory data on Friday showed investors increased net bearish bets in Chicago wheat futures, even as the report is expected to shift attention back to global production numbers. Total Farm Marketing analyst Naomi Blohm said bearish wheat sentiment had shifted to neutral, and that all eyes are on the USDA’s global production figures.
Latest closeWheat $639.50 ▼0.0%|Corn $462.00 ▲5.2%