USA – The Chicago Board of Trade (CBOT) says wheat, soybean, and corn futures have declined, with traders awaiting key data from the U.S. Department of Agriculture (USDA).
The USDA’s report, due by Sep 30, is expected to reveal the largest September stocks of all three crops in the U.S. since 2020. This data could impact market prices, providing clarity on the abundance of these crops.
As of 0322 GMT, the most active wheat contract on the Chicago Board of Trade (CBOT) dropped by 0.6%, settling at US$5.76-1/2 a bushel. Corn followed suit, slipping 0.4% to US$4.16-1/4 a bushel, while soybeans fell 1.2% to US$10.53 a bushel.
A plentiful supply of these major crops had driven prices to four-year lows during July and August 2024.
However, a weaker U.S. dollar has since provided some support, making U.S. agricultural products more competitive in international markets.
Analysts expect the weakened dollar to stimulate economic activity and boost global demand, which may aid recovery in futures prices.
Dennis Voznesenski, an analyst at Commonwealth Bank, emphasized that “the demand side is starting to improve,” which could benefit prices.
Despite the weakened dollar, challenges persist in global supply chains. In particular, soybean futures climbed on Sept 27 to their highest level in two months.
The rise was driven by Hurricane Helene, which disrupted crops and infrastructure along the Gulf Coast. Brazil, a leading producer, has also faced dryness, delaying the start of the country’s soybean planting season.
While some markets face tightening supply outlooks, the U.S. continues to harvest a bumper crop of corn and soybeans, which should keep price increases limited.
Voznesenski noted that despite supply challenges in other regions, the ample U.S. harvest is likely to provide some price stability.
Sentiment among speculators also appears to be shifting. After months of bearish bets in Chicago corn and soybean markets, speculative positions are now aligning with typical supply-heavy years. While this suggests a more balanced outlook, some uncertainties remain, especially concerning wheat.
According to analysts, the USDA’s upcoming report will play a crucial role in determining short-term market dynamics.
If stocks exceed expectations, prices could see further downward pressure. However, ongoing weather-related challenges and international export developments may continue to influence the global grain and oilseed markets.
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