Air Freight News

Wheat dips to lowest since 2021 on good weather and big acreage

Wheat touched the lowest price since September 2021 as good winter crop weather and big plantings in the US help calm worries of global grain shortfalls.

Dry areas of Kansas, a top producer, benefited from snow over the weekend and more precipitation is forecast for the Southern Plains this week. The moisture boost comes as money managers have raised their bearish bets on Chicago wheat to the highest in almost four years, as supply concerns ease over weather setbacks and exports out of the war-torn Black Sea. 

Algorithmic traders on Monday “piled on as the selling picked up speed,” said Arlan Suderman, chief commodities economist at StoneX. Both Chicago futures, the world benchmark, and Minneapolis spring wheat broke through recent lows.

America’s wheat farmers are nervously watching the weather after severe drought in some areas last year pinched yields, which in turn pushed up futures and added to the worst food inflation in decades. The stakes are now high as the price run-up is seen as having spurred bigger wheat plantings this season. 

Bumper crops later this year could help to further allay food inflation. In the shorter term, temperatures cold enough to damage or even kill off wheat are headed for the US grain belt next week, though the recent snowfall is seen protecting most crops, the Commodity Weather Group said on Monday. 

The March Chicago wheat contract fell as much as 3.9% to $7.125 a bushel, the lowest since September 2021. Most-active hard red winter wheat futures dropped as much as 4.4% to $8.11 a bushel, the biggest percentage decline since early November. Spring wheat declined as much as 3% in Minneapolis.

Also pressuring prices is lackluster demand for us wheat amid tough global competition for grains, including from Russia.

Good crop weather also sent soybeans and corn down, with Chicago futures falling for a fourth straight drop as rains relieved parched crops in parts of Argentina, aiding global supplies.

Soybeans posted their longest stretch of daily losses since September.  

Argentina soybean areas are expected to get some drought relief from weekend rains and more precipitation projected for the coming 10 days, Commodity Weather Group said in report.



© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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