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CBOT Wheat Futures Plunge to Lowest Since April on Strong Dollar and Improved Supply Outlook

24 Jun 2024 8:30 am
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Mumbai, 24 Jun (Commoditiescontrol): Wheat futures on the Chicago Board of Trade (CBOT) dropped to their lowest levels since April on Monday, pressured by a strengthening dollar and an improving global supply outlook. The most-active wheat contract on the CBOT fell 0.4% to $5.73-1/2 per bushel after hitting $5.73, the lowest since April 22.

The recent downturn contrasts with last month's peak when wheat prices soared to a 10-month high of $7.20 due to downgrades in Russia's harvest outlook. However, weather conditions in Russia have since improved, leading consultants IKAR to raise their forecast. Russia's agriculture minister also noted that frosts had minimal impact on harvest volumes, as most affected farmland has been successfully reseeded.

Weather conditions in other major wheat-producing countries, such as Australia and Canada, have also improved. In the United States, the wheat harvest is progressing rapidly, and Ukrainian farmers have started bringing in their crops.

The rise of the U.S. dollar to its highest level since early May has made American farm goods more expensive for international buyers using other currencies, further weighing on wheat prices.

In France, the condition of the main wheat crop remained unchanged for the second consecutive week, although the harvest is expected to decline significantly this summer due to a damp growing season.

U.S. wheat export sales for the week ending June 13 exceeded trade estimates, while corn sales fell well below expectations, according to the U.S. Department of Agriculture.

Additionally, commodity funds were net sellers of CBOT wheat futures on Friday, according to traders, contributing to the downward pressure on prices.

The combination of a robust U.S. dollar, improved weather conditions in key production areas, and a ramping up of harvest activities in several countries has led to an improved supply outlook, resulting in the significant drop in CBOT wheat futures.

(By Commoditiescontrol Bureau: 09820130172)

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