Wheat declines after a surge but is limited by Russian supply issues
Thursday saw the first decline in Chicago wheat prices in five sessions. At the same time, losses were restrained by worries over supply from Russia after global grain trader Cargill announced it would no longer handle the nation’s grain at its export terminal.
Corn strengthened while soybeans dipped somewhat. As of 04:26 GMT, the most active wheat contract on the Chicago Board of Trade decreased 0.1% to $7.04 per bushel. Corn increased a quarter of a cent to $6.50-3/4 a bushel, while soybeans lost a half-cent to $14.76-3/4.
Cargill Inc. will no longer handle the leading wheat supplier’s grain at its export terminal starting in July. However, the company announced its shipping business would continue transporting grain from Russian ports on Wednesday.
If Moscow were to suggest a temporary suspension of wheat and sunflower shipments, as the Russian business newspaper Vedomosti reported last week, Russian exports might also be impeded.
According to sources who spoke to Reuters afterwards, Russia has no intentions to stop wheat exports. Still, it wants exporters to ensure that the prices paid to farmers are high enough to cover typical production expenses.
But, according to data from the agriculture ministry released on Wednesday, Ukraine’s grain exports have increased to 5.1 million tonnes so far in March from 1.4 million tonnes in March 2022. Following the destruction of its fields by the worst drought in a century and a near halving of its yield in 2023, analysts predict that Brazil will provide up to half of the soybeans that Argentina will purchase. According to dealers, commodity funds were net sellers of soymeal on Wednesday and net purchases of CBOT corn, soybean, wheat, and soy oil futures contracts.
EU wheat prices rise as a result of Cargill’s decision to reduce its exports to Russia
The price of European wheat increased to nearly a two-week high on Wednesday after American grain trader Cargill announced it would cease exporting wheat to Russia, the largest exporter of the grain in the world, due to concerns about the impact of the dry weather on American winter crops.
On the Paris-based Euronext, the 2022/2023 season’s final contract for May milling wheat (BL2K3) hit a high of 271.75 euros (equivalent to $287.13) per tonne, its most noteworthy cost since the sixteenth of March. Eventually, the contract ended 0.7% higher at 265.25 euros.
Although its shipping unit will continue to transport grain from Russian ports, Cargill is moving farther away from the Russian market as it aims to stop processing Russian grain from its export terminal as of the upcoming season, the firm told Reuters.
