Mumbai, 20 May (Commoditiescontrol): Chicago Board of Trade (CBOT) wheat futures rebounded on Monday, climbing 1% as global supply worries bolstered prices. The most-active wheat contract on the CBOT was up 1% at $6.57-1/2 per bushel as of 0016 GMT, recovering from a 1.8% decline on Friday.
Concerns over declining production in major exporting countries, particularly Russia, have significantly influenced the market. Russia, the world's top wheat supplier, is expected to export 46.9 million metric tons in the 2024/25 season, according to the Russian Union of Grain Exporters. This forecast is slightly lower than the agriculture ministry's estimate of 47 million tons for the 2022/23 season.
Adverse weather conditions in Russia and parts of Europe are exacerbating supply issues. In France, the state of soft wheat crops remained at a four-year low last week, with 64% rated in good or excellent condition as of May 13, unchanged from the previous week but down from 93% a year earlier, according to FranceAgriMer. Meanwhile, Germany's winter wheat area for the 2024 harvest has been reduced by 8.3% year-on-year to approximately 2.6 million hectares, the national statistics agency reported.
Despite these concerns, improved crop prospects in the United States may temper further gains in CBOT futures. The Wheat Quality Council's annual crop tour concluded on Thursday, estimating Kansas wheat's yield potential at 46.5 bushels per acre (bpa), the highest since 2021 and above the five-year tour average of 42.4 bpa.
Additionally, the Commodity Futures Trading Commission's weekly report indicated that non-commercial traders, including hedge funds, reduced their net short positions in CBOT wheat, signaling a potential shift in market sentiment.
Overall, while global supply concerns drive CBOT wheat futures higher, improved U.S. crop prospects could cap the gains, maintaining a complex balance in the wheat market.
(By Commoditiescontrol Bureau: 09820130172)
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