Wheat Prices Rebound Slightly, Corn and Soybeans Decline Amid Trade Tensions and Favorable Planting Conditions

SINGAPORE/PARIS: Wheat futures in Chicago experienced a modest increase on Wednesday, climbing for the first time in three sessions. This uptick was fueled by bargain-hunting activities; however, the gains were tempered by much-needed rainfall across the U.S. crop region. Meanwhile, corn and soybean prices edged lower due to the rapid pace of U.S. planting and ongoing trade friction between Washington and Beijing.

The most actively traded wheat contract on the Chicago Board of Trade (CBOT) saw a 0.2% rise, reaching $5.26-3/4 per bushel as of 1042 GMT, following a roughly 2.5% drop on Tuesday. In contrast, soybeans decreased by 0.9% to $10.43-3/4 per bushel, and corn fell by 0.1% to $4.69-3/4 per bushel.

According to consultancy Agritel, the considerable improvement in U.S. winter wheat conditions is exerting significant downward pressure on the market. This pressure is compounded by forecasts of beneficial rainfall in the southern Great Plains.

The U.S. Department of Agriculture (USDA) reported on Monday that U.S. farmers had successfully planted 24% of the corn crop by Sunday. This figure is slightly below analysts’ expectations by one percentage point but remains ahead of the five-year average of 22%.

Crop Progress and Trade War Impact

The USDA also indicated that 18% of the soybean crop had been planted, surpassing both the five-year average of 12% and analysts’ projections of 17%.

The ongoing trade dispute between China and the U.S. continues to cast a shadow over the prospects for U.S. soybean exports.

China intends to reduce grain usage in livestock feed to approximately 60% and decrease soymeal content to around 10%, as stated by the agriculture ministry.

However, achieving these targets may prove challenging, given that China’s soybean imports reached record levels last year, raising questions about the feasibility of implementing feed reformulation strategies.

Favorable weather conditions in South America also weighed on corn and soybean markets. Recent rainfall has alleviated drought conditions that threatened Brazil’s safrinha corn crop, while a dry spell in Argentina is expected to facilitate corn and soybean harvesting after periods of heavy rainfall.

Traders noted that commodity funds were net sellers of CBOT corn, soybean, wheat, and soyoil futures contracts on Tuesday but were net purchasers of soymeal futures.