Wheat falls on profit taking after rally - CBOT

Corn and soy firm
calendar icon 25 May 2023
clock icon 2 minute read

US wheat futures fell on Wednesday on a round of profit-taking as traders said the market lacked fundamental inputs to drive prices higher a day after a rally driven by renewed concerns over a Black Sea deal, reported Reuters.

Corn futures were firm for the second day in a row, with the market underpinned by signs of strength in the cash market and growing concerns about dry conditions in the US Midwest. The soybean market was mostly stronger on support from technical buying.

Wheat futures surged 2.6% on Monday but ample supplies in Russia - underscored by falling prices, a planned revision of its export tax, and favourable harvest prospects - continued to cap wheat prices, traders said.

"There has not been any demand," said Scott Harms, agricultural risk specialist at Archer Financial Services. "We just do not have a home for US wheat."

At 11:19 am CDT (16:19 GMT) , Chicago Board of Trade (CBOT) July soft red winter wheat was down 12-1/4 cents at $6.10 a bushel.

On Tuesday, Ukraine accused Russia of effectively cutting the Ukrainian port of Pivdennyi out of a deal allowing safe Black Sea grain exports of food and fertiliser from Ukrainian ports of Odesa, Chornomorsk and Pivdennyi. Russia complained it had been unable to export ammonia via a pipeline to Pivdennyi.

In China, a surplus of cheap wheat is curbing consumption of both corn and soymeal, according to feed makers and analysts.

A firm dollar and financial market weakness, as investors fretted about stalled talks to raise a US government debt ceiling, further weighed on sentiment, traders said. 

CBOT July corn futures were up 10 cents at $5.87 a bushel.

Latest weather forecasts were showing a greater chance of rain in parts of the central United States and Canada, though the eastern Midwest was set to stay dry into early June. The dry spell has raised early worries about summer drought, though for now it has aided spring planting.

"That's not a problem today, but in two weeks, if that pattern has not changed it becomes a bigger problem," Harms said.

CBOT July soybeans were up 2-1/4 cents a $13.24-3/4 a bushel.

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