Wheat Prices Edge Higher on Bargain-Hunting, US Weather Weighs

SINGAPORE: Wheat futures in Chicago experienced a slight increase on Wednesday, marking the first rise in three sessions. This uptick was driven by bargain-hunting activities. However, the gains were limited due to beneficial rainfall in vital US agricultural regions.

Corn and soybean values decreased, impacted by the swift progression of US planting efforts and ongoing trade tensions between Washington and Beijing.

Market Commentary

A Singapore-based grains trader noted, “Planting is progressing well in the US Midwest, and rains are aiding winter wheat crops in the US Plains.” The trader added, “These factors create a bearish outlook given uncertainties on the demand side, with the trade war reducing US grain and oilseed exports to China.”

Market Performance
  • The most active wheat contract on the Chicago Board of Trade (CBOT) saw a 0.1% increase, reaching $5.26 per bushel as of 0311 GMT, following a roughly 2.5% drop on Tuesday.
  • Soybeans experienced a 0.6% decline, settling at $10.47 a bushel.
  • Corn prices decreased by 0.1%, trading at $4.70 a bushel.

The recent precipitation in the US Plains has bolstered winter crop conditions, putting downward pressure on prices.

Focus on US Planting Progress

Market attention is currently directed towards the advancement of US planting. According to a USDA report released on Monday, US farmers had planted 24% of the corn crop by Sunday. This figure is slightly behind analysts’ expectations by one percentage point but surpasses the five-year average of 22%.

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

Trade War Impact

The ongoing trade dispute between China and the US continues to cast a shadow over US soybean export prospects.

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

Corn and soybean markets also faced downward pressure due to favorable crop conditions in South America.

Recent rainfall has mitigated drought conditions that threatened Brazil’s safrinha corn crop. Meanwhile, a dry period in Argentina is expected to facilitate corn and soybean harvesting following significant rainfall.

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