Mumbai, 31 May (Commoditiescontrol): Chicago Board of Trade (CBOT) wheat futures edged higher on Friday, buoyed by a weaker dollar, yet remained on track for a weekly decline as traders evaluated the impact of crop losses in Russia on sustained high prices.
The most-active wheat contract on the CBOT rose 0.8% to $6.84-1/4 per bushel but was down 1.5% for the week. Earlier in the week, wheat prices surged to $7.20, the highest since July of last year, marking a 37% increase from a mid-March low.
Russian analysts have revised their harvest estimates downward by approximately 12 million metric tons due to dry conditions and spring frosts. Similar dry conditions are also threatening crops in Ukraine, where the harvest season is imminent. The possibility of India resuming wheat imports is further tightening global supply.
Weather forecasts predicting rainfall in parts of Russia and Ukraine have led some investors to take profits, causing prices to dip. However, analysts remain uncertain about the extent to which the rain will improve the crop outlook. The combined shortfall from Russia and potential imports by India could reduce global wheat supplies by as much as 17 million tons, about 8% of the U.S. Department of Agriculture's 2024-25 world wheat export forecast.
In other developments, European Union trade ministers agreed to impose prohibitive tariffs on cereals, oilseeds, and derived products from Russia and Belarus starting July 1. Meanwhile, the European Commission maintained its monthly forecast for the EU's main wheat crop in 2024/25 at a four-year low but raised its stock outlook due to larger-than-expected leftover supplies from this season.
Australia's weather bureau predicts dry conditions for most main cropping regions in June, followed by significantly wetter conditions from July, improving the crop outlook. Additionally, monsoon rains have arrived in India's southernmost state of Kerala, two days ahead of schedule.
Commodity funds were net sellers of CBOT wheat futures contracts on Thursday, indicating cautious market sentiment.
These varied factors continue to influence wheat market dynamics, leaving traders and analysts to monitor conditions closely.
(By Commoditiescontrol Bureau: 09820130172)
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