Mumbai, 22 May (Commoditiescontrol): Chicago Board of Trade (CBOT) wheat futures surged to a 10-month high on Wednesday, driven by expectations of reduced supply from Russia, the world's largest wheat exporter. The most-active wheat contract on the CBOT rose by 1%, closing at $7.04-1/2 a bushel after peaking at $7.07-1/2. This marks a 17% price increase for wheat this month alone.
The rally is fueled by adverse weather conditions in Russia, which have led to repeated downgrades in harvest estimates. The latest forecast from Russia's IKAR agricultural consultancy lowered the country's wheat harvest projection to 83.5 million metric tons, down from 86 million tons. Consequently, the forecast for Russian wheat exports has also been cut to 45 million tons from 47 million tons.
This revision marks the third downgrade this month, with initial estimates exceeding 90 million tons before severe dry weather and frosts took a toll. The new Russian agriculture minister, Oksana Lut, announced that approximately 900,000 hectares of frost-damaged crops would need replanting.
Ukraine's crops have not suffered significant damage from recent frosts, according to state weather forecasts. However, traders remain cautious following a warning from consultants APK-Inform about potential yield losses.
In the United States, the Department of Agriculture (USDA) recently downgraded its winter wheat crop condition rating to 49% good to excellent, down from 50%. While this figure fell short of analysts' expectations by 2%, it remains the highest for this period since 2020.
The bullish sentiment was reinforced as commodity funds became net buyers of CBOT wheat on Tuesday, further propelling the price surge. Soybeans and corn have also seen significant gains, rising 10% and 13% respectively from their lows this year, while wheat has soared nearly 35%.
(By Commoditiescontrol Bureau: 09820130172)
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