Wheat loses momentum after rally, traders watch weather in Black Sea region

Chicago wheat futures declined Wednesday as investors booked profits after a recent rally and questions remained about whether forecasts of rain in Russia could stop the deteriorating crop outlook in the world’s biggest exporter.

“Rain is forecast to reduce the severity of the wheat market,” said Brian Hoopes, president of Midwest Market Solutions.

Analysts have lowered their estimate for this month’s wheat crop in Russia by about 10 million tons because of persistent drought and severe spring frosts. Weather charts suggest rain this week could reach parts of southern russia and Ukraine, although analysts remain uncertain whether the moisture will lead to a significant improvement in the crop.

The most-active wheat contract on the Chicago Board of Trade (CBOT) fell 7-1/2 cents to $6.92-3/4, down from a 10-month high reached during the previous session.

Soybean and corn futures fell amid technical trading and a U.S. Department of Agriculture report Tuesday showing rapid planting progress in the U.S. Midwest. Soybeans were down 15-1/2 cents to $12.14 a bushel, while corn was down 7-1/4 cents at $4.55-1/4 a bushel.

The USDA’s weekly crop report showed corn and soybean planting slightly ahead of the five-year average pace, with 83% and 68% completion, respectively. Soybean planting was 68% complete, above analysts’ average estimate of 66% and the five-year average of 63%. Traders expect U.S. soybean futures to remain under pressure due to abundant supplies from South America. CBOT July soybean meal fell $7.5 to close at $369.1 per short ton.

July CBOT soybean oil prices rose 0.36 cents to 45.88 cents per pound.

Improved U.S. planting weather and good crop reports are putting bearish pressure on corn and soybean prices, while falling wheat prices are weighing on the grain market.

“Planting continues despite the moisture that is putting pressure on prices,” said Lane Akre, commodity economist at Pro Farmer.

Tags: prices, wheat