International Wheat Prices Near 2-Week Low on Black Sea Competition

CHICAGO: Wheat gained a little bit, but the market was close to its two-week low because a tender from top importer Egypt brought attention to competition from the Black Sea region and allayed fears that the war between Russia and Ukraine would cut supplies.

While corn firmed, soybeans remained under pressure from improved weather in Argentina and a record crop in Brazil.

According to Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, “The market, prompted by weakening U.S. export inspections, is again questioning whether U.S. prices are too high.” And the solution is to reduce prices until there are more buyers.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.3 percent at $7.52 a bushel as of 0324 GMT, after falling to its lowest level since February 7 at $7.46-3/4 a bushel on Wednesday. Global wheat buyers are avoiding forward purchases.

Corn gained 0.2 percent to $6.75-1/2 bushels, while soybeans gained 0.1 percent to $15.35-3/4 bushels.

Egypt’s wheat tender served as a reminder of the fierce competition for exports from suppliers in the Black Sea. According to traders, the only non-Black Sea wheat offer, which was for French supplies, was the most expensive in the tender. Russian wheat had the lowest offer. There was no US wheat available.

Egypt’s state grain buyer booked 240,000 tonnes of Russian wheat after the CBOT closed on Wednesday.

A senior Ukrainian official stated on Wednesday that Ukraine will request that Turkey and the United Nations begin negotiations this week to extend the Black Sea grain deal by at least one year and include the Mykolaiv ports.

For soybeans, there were a few good showers in Argentina because of the drought, and the harvest of a Brazilian crop that was at an all-time high accelerated, putting more pressure on prices.

Traders are waiting for preliminary forecasts for major U.S. crop plantings and production in 2023 at the annual two-day U.S. Department of Agriculture Outlook Forum, which begins on Thursday.

According to Reuters’ survey of analysts, U.S. corn plantings were expected to reach 90.9 million acres, up from 88.6 million acres in 2022, and soybean plantings were expected to reach 88.6 million acres, up from 87.5 million acres in 2022.

On Wednesday, traders reported that commodity funds were net buyers of soyoil futures and net sellers of CBOT wheat, corn, soybean, and soymeal futures contracts.