Wheat slips after Canada, Australia raise output forecasts

Chicago wheat futures retreated on Tuesday after major exporters Canada and Australia upgraded their production forecasts, boosting the outlook for global supply.

Statistics Canada raised its estimate for all-wheat production to 32 million metric tons from 29.8 million tons, and Australia lifted its harvest forecast by about 100,000 tons to 25.5 million tons.

The Chicago Board of Trade’s (CBOT) most-active wheat contract was down 0.2% at $6.19 a bushel by 0459 GMT after touching $6.26-1/2 on Monday, its highest since Aug. 28.

Wheat had risen around 10% over the last five sessions, and received a boost on Monday when the U.S. government confirmed the largest one-off private wheat sale to China since 2020.

“There’s still quite a lot of grain in the world,” said Andrew Whitelaw, an analyst at consultants Episode 3, adding that he didn’t see reason for prices to either fall or rise much in the near term.

The U.S. Department of Agriculture (USDA) on Monday reported private sales of 440,000 metric tons of U.S. soft red winter wheat to China.

The news hit a market in which speculators hold a huge net short position, making it vulnerable to bouts of short-covering that push prices higher.

Commodity funds were net buyers of Chicago wheat on Monday, traders said.

Cheap exports of wheat from Russia pushed prices to a three-year low of $5.40 in September and have since held them close to those levels.

Russia’s harvest is now almost complete. Russian export prices rose slightly last week and consultants Sovecon lowered their estimate for November wheat shipments by 0.4 million tons to 3.4 million tons.

Ukraine’s grain exports have meanwhile fallen to around 13.4 million metric tons so far in the July 2023-to-June 2024 marketing season from 18.3 million tons over the same period a year ago, government data showed.

Meanwhile, Chicago soybeans edged up after falling in recent sessions as rain forecasts eased fears about supply from drought-stricken areas of Brazil, while corn prices dipped.

CBOT soybeans rose 0.2% to $13.08-1/2 a bushel and corn fell 0.2% to $4.84-1/2 a bushel.

Corn, which remains close to three-year lows, drew limited support on Monday from a USDA report showing that more than 1.2 million metric tons were inspected for export in the latest week, well above trade expectations.

Tags: wheat, forecast, futures, Australia, Ukraine, exports, grain, estimate, Canada, Outlook, Production