U.S. grains: Wheat closes higher on dry weather, Russian threats

Markets await monthly supply and demand report from USDA

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Published: April 10, 2023

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CBOT May 2023 soft red winter wheat with 20-day moving average, MGEX May 2023 hard red spring wheat (yellow line) and K.C. May 2023 hard red winter wheat (orange line). (Barchart)

Mexico City | Reuters — Chicago wheat futures were higher on Monday, as dry weather put Kansas City wheat at risk and Russia’s threat to bypass a UN-brokered grain deal underpinned prices, traders said.

Corn also closed higher, though soybeans dipped as warm and dry weather improved the planting outlook in the United States, analysts said.

“In the western part of the belt where all that high-protein wheat is, they need rain, so it’s push and pull,” said Craig Turner, a commodities broker at Daniels Trading.

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The U.S. Agriculture Department’s weekly crop progress report said 27 per cent of winter wheat was in good to excellent condition compared to 28 per cent a week ago — tied for the worst on record for early April.

The most-active wheat contract on the Chicago Board of Trade (CBOT) settled up three cents at $6.78-1/2 per bushel, while K.C. May hard red winter wheat closed 11.5 cents higher at $8.76 a bushel (all figures US$).

Corn settled up 10-1/2 cents at $6.54 per bushel, while soybeans closed down 5-1/2 cents at $14.87-1/4 per bushel.

Russia on Friday threatened to bypass the UN-brokered grain deal unless obstacles to its agricultural exports were removed, while talks in Turkey agreed removing barriers was a necessary condition to extending the agreement beyond next month.

Ukraine’s grain exports for the 2022-23 season were at 38.8 million tonnes as of Monday, agriculture ministry data showed.

The volume so far in the current July-to-June season included about 13.3 million tonnes of wheat, 22.8 million tonnes of corn and 2.31 million tonnes of barley.

Traders were looking to the release of a monthly global supply and demand report from the U.S. Department of Agriculture on Tuesday.

“Markets are going to be looking for the USDA to reduce South American production to get more in line with what the reporting agencies in Argentina and Brazil have been saying,” Turner said.

“Once they do, that likely increases U.S. exports,” he added.

— Reporting for Reuters by Cassandra Garrison in Mexico City and Naveen Thukral in Singapore, additional reporting by Nigel Hunt in London.

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