U.S. grains: Wheat futures surge as supplies drop to 14-year low

CBOT soybean futures hit lowest since Dec. 29

CBOT December 2021 wheat (candlesticks) with Bollinger bands (20,2). (Barchart)

Chicago | Reuters — Chicago wheat futures surged on Thursday, after the federal government reported that U.S. supplies of wheat have fallen to their lowest level since 2007 — and that the wheat harvest is the smallest seen in 19 years.

At the same time, the country ended the Sept. 1 crop year with slightly more soybeans than traders had expected, which sharply pressured bean futures.

Tight wheat supplies in the U.S., the world’s third-largest exporter of the grain, helped lift benchmark Chicago Board of Trade wheat futures to a three-week high and signaled higher costs for millers and bakers ahead. The news also came as global supplies were already shrinking due to stressful crop weather in Canada and Russia.

Chicago Board of Trade December wheat settled up 15-1/4 cents at $7.25-1/2 a bushel (all figures US$). CBOT November soybeans ended down 27-3/4 cents to settle at $12.56 a bushel, while December corn slipped 2-1/4 cents at $5.36-3/4 a bushel.

“The corn (futures price) would be down lower if there wasn’t such a bullish number on wheat,” said Craig Turner, senior ag broker at Daniels Trading.

U.S. farmers produced 1.646 billion bushels of wheat in 2021, down from 1.826 billion a year ago, according to the U.S. Agriculture Department’s small grains summary report on Thursday. And domestic wheat stocks on Sept. 1 stood at 1.78 billion bushels, USDA said in its quarterly stocks report.

Going into the report, wheat was already rebounding after a sharp sell-off earlier in the week, as strength in international oilseed and cereal markets helping offset pressure on the overall grains complex from a rising dollar.

And earlier in the session, the trade saw soybean futures firm with signs of strong export demand, with prices hitting their overnight high after USDA’s export sales report was released.

But the USDA report, which showed U.S. soybean stocks standing at a five-year low of 256 million bushels, fueled selling, traders said. While supplies remain tight, the reported tally was bigger than analysts were expecting.

Corn stocks were reported at 1.236 billion bushels, the lowest since 2014.

— Reporting for Reuters by P.J. Huffstutter in Chicago; additional reporting by Julie Ingwersen in Chicago.

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