SINGAPORE, Oct 21: Chicago wheat rose for a third consecutive session on Monday to its highest since early June as forecasts of lower production in Argentina added to concerns over tightening global supplies.
Corn eased, hovering around its lowest level in three years with rapid harvest of a record large U.S. Crop weighing on the market, while soybeans ticked lower.
Argentina’s agriculture ministry last week estimated wheat production at 8.8 million tonnes. The estimate, released shortly before the close of trading, was sharply lower than the 12 million tonnes forecast by the U.S. Agriculture Department last month.
‘Argentina’s wheat production outlook has been revised downward, which could translate into higher demand for U.S. wheat as we already have seen problems with crops in Brazil and China,’ said Vanessa Tan, investment analyst at Phillip Futures in Singapore.
Brazil has stepped up purchases of U.S. Wheat after frost damaged crops in Argentina, usually the source of much of Brazil’s wheat imports, while China has been taking U.S. and Australian wheat after crop damage earlier this year.
U.S. Wheat exports are running at a strong pace.
On Friday, the U.S. Department of Agriculture reported net sales of 837,800 tonnes for the week ending September 26, which was up 35 percent from the previous week and 32 percent more than the prior 4-week average.
The USDA will need two weeks to bring its export sales reports up to date after missing four of the weekly reports during the U.S. Government shutdown.
Chicago Board Of Trade December wheat rose 0.4 percent to $7.08-1/4 a bushel, adding to a 2.9 percent gain on Friday. Earlier in the session, the market touched a high of $7.11-1/4 a bushel, the highest since June 5.
December corn slid 0.2 percent to $4.40-1/2 a bushel and November soybeans lost 0.1 percent to $12.90 a bushel.
Corn is under pressure as record U.S. Supplies hit the market. Active harvesting of the U.S. Corn crop will keep a lid on CBOT corn futures well into next year despite improving demand for the world’s chief feed grain due to lower prices, analysts said.
U.S. Corn production prospects have jumped nearly 30 percent from last year’s drought-reduced crop, leading to an expected supply buildup from a 17-year low this year to an eight-year high next year.
‘Corn is facing seasonal harvest pressure. There are forecasts of some light showers which are unlikely to have a significant impact on the pace of the harvest,’ said Tan.
Commodity funds bought a net 6,000 CBOT wheat contracts on Friday, trade sources said. They sold 3,000 corn and sold 2,000 soybean contracts.
The USDA has said it was cancelling an already delayed October crop production report, originally scheduled for Oct. 11, the first time it has scrapped the report in 147 years. The next USDA crop report is scheduled to be released on Nov. 8.
(agencies)
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