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Wheat at 1-week high on Argentina crop woes, easing recession fears

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SINGAPORE — Chicago wheat futures jumped more than 2% and touched a one-week high on Friday, building on the previous session’s rally as easing concerns over a global recession and worries about lower production in Argentina underpinned the market.

Corn and soybeans rose for a third consecutive session.

“Receding macro worries, and what most would regard as too low prices, set the market up for these gains,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, referring to the move in wheat prices.

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“We also note that estimates for Argentina’s wheat planting are being cut because of continued dryness in some regions.”

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 2.2% at $8.55 a bushel, as of 0229 GMT, after climbing to its highest since July 1 at $8.55-1/4 a bushel earlier in the session.

Corn rose 1.2% to $6.03-1/4 a bushel and soybeans gained 1.2% at $13.81-3/4 a bushel.

While wheat is poised to end the week on a positive note, corn is down for a third straight week and soybeans are on track for a fourth weekly loss.

Asian shares tracked overnight Wall Street gains in early trading on Friday as fears of an economic slowdown cooled and sterling began to claw back recent losses following British Prime Minister Boris Johnson’s decision to resign.

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The wheat market, which has advanced in recent months on concerns over lower supplies from Black Sea region, is bracing itself for more production losses.

Argentina’s wheat-planting area for the current 2022/2023 harvesting season is estimated at 6.2 million hectares (15.3 million acres), down from the 6.3 million hectares previously estimated, the Buenos Aires grains exchange said on Thursday.

The cut is the fourth made by the exchange since the season began in May, mainly due to unfavorable weather that has prevented many farmers from meeting their original planting targets.

Forecasts for dry weather in the U.S. Midwest through the middle of July, a critical period for corn development, is supporting prices.

However, Brazil is expected to harvest a record wheat crop of 9 million tonnes in 2022, with growers sowing the largest area for this crop in the past 32 years, according to a survey released on Thursday by Conab, the country’s food supply and statistics agency.

The U.S. Department of Agriculture is slated to issue weekly U.S. grain export sales data later in the day.

Commodity funds were net buyers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts on Thursday, traders said.

(Reporting by Naveen Thukral; Editing by Amy Caren Daniel and Sherry Jacob-Phillips)

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