Chicago wheat futures on Friday were on track for a second monthly gain after a severe drought curbed production of top quality spring crop in the United States and as Russia, the world’s largest wheat exporter, reduced its output estimates.
Soybeans and corn are set to finish July in negative territory on slowing demand in top importer China.
“Adverse weather has damaged the U.S. spring crop,” said one Singapore-based grains trader at an international trading company. “The output is not just below average but record low.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.5% at $7.02 a bushel, as of 0254 GMT. Wheat gained 3.3% so far this month.
Soybeans lost 1.6% in July after closing almost 9% lower last month, and corn is down nearly 6% this month, its third monthly decline.
Scouts on the second day of the Wheat Quality Council’s annual tour found that spring wheat yield prospects in northwest North Dakota were well below average.
The final yield projection for North Dakota, the top U.S. spring wheat producer, peg the state’s yield at 29.1 bushels per acre, far short of the crop tour average from 2015 to 2019 of 43.6 and the lowest on record going back to 1993.
Russian state weather forecaster cut its estimate for the country’s 2021 grain crop by 3 million tonnes to 121 million tonnes after drying and cleaning due to dry weather, the RIA news agency reported on Thursday.
Russia has been hit by dry and hot weather in part of its central and Volga regions in July, Roman Vilfand, head of science at Hydrometcentre, told RIA.
The International Grains Council cut its 2021/22 world wheat crop outlook by one million tonnes to 788 million, with the diminished outlook for North America partially offset by improved prospects in the European Union.
The IGC raised its forecast for world 2021/22 corn (maize) production by one million tonnes to 1.202 billion tonnes.
Commodity funds were net buyers of CBOT wheat, soybean, corn, soyoil and soymeal futures contracts on Thursday, traders said.
Source: Reuters (Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips)