The US: Chicago Wheat Futures Fall


Mar 14, 2023 | Agricultural Markets News

Reading time: 2 minutes

Wheat prices “probably won’t be quite as good for US farmers” in 2023 as last year, a top grain economist says. “We won’t see last year’s prices. We’ll be several dollars short of that,” said Randy Fortenbery, the Thomas B. Mick Endowed Chair in Small Grain Economics at Washington State University, told farmers during the Spokane Ag Show. “We can’t be thinking we’re going to see 2022 Wheat prices … unless there’s some other shock that’s not being anticipated.”

Soft white Wheat ranged from $8.45 to $8.55 per bushel on the Portland market as of Feb. 8. Fortenbery advised farmers to be careful about assuming they’ll see prices above $10 a bushel. He expects Wheat prices to trade within a $3 to $3.50 a bushel range. He added that about $9.25 to $10 per bushel would be the high end. 

Chicago Wheat futures fall, set for 4th week of decline. Chicago Wheat lost more ground last Friday, with the market poised for its fourth week of decline on growing expectations of a Black Sea deal, allowing Ukraine to continue shipping grains. It lost more than 15% during the period; soybeans have given up less than 1% last week, and corn is down more than 4%. Corn and soybeans were also on track for a weekly drop, although losses were limited by a severe drought dragging down yields in key supplier Argentina. 

The most active Wheat contract on the Chicago Board of Trade (CBOT) slid 0.2% to $6.64-1/2 a bushel, corn was unchanged at $6.11-1/2 a bushel, and soybeans lost 0.2% to $15.08-1/2 a bushel. “…weak U.S. export sales news plus more talk of an export deal for Ukraine to continue to export from Black Sea ports are factors which helped to pressure (prices),” Hightower said in a report.

As per the AgFlow data, the US shipped 1.6 million tons of Wheat in Jan 2023Key markets were Mexico (0.22 million tons), Japan (0.21 million tons), South Korea (0.15 million tons), the Philippines (0.15 million tons), and China (0.13 million tons). Tiny markets included Malaysia, Grenada, Bangladesh, Vietnam, and Myanmar.Last year’s export volume hit 17.3 million tons.


The US: Chicago Wheat Futures Fall

The US Wheat Market Influencing Factors

The U.S. Wheat market has been under pressure from Russian export competition and expectations that the wartime grain corridor from Ukraine will be extended beyond this month, increasing global supplies. However, Russia last Thursday said the deal to ensure safe exports of grain from Ukraine’s Black Sea ports was only being “half-implemented,” raising doubts about whether it would allow an extension of the agreement.

La Niña has ended, and ENSO-neutral conditions are expected to continue through the Northern Hemisphere spring and early summer of 2023, a U.S. Government weather forecaster said on Thursday, with El Niño possibly forming during summer 2023 and persisting through the fall. El Nino is a warming of ocean surface temperatures in the eastern and central Pacific, which could boost precipitation, brightening the outlook for U.S. crops.

Extreme drought continues to reduce soybean and corn yields in Argentina. The country’s soybean production for the 2022/2023 harvesting season is estimated at 29 million tonnes, down from the 33.5 million tonnes previously estimated, the Buenos Aires grains exchange said. The exchange cut its estimate for 2022/23 corn production to 37.5 million tonnes, down from the 41 million tonnes previously expected. Traders noted that commodity funds were net sellers of CBOT corn, Wheat, soybean oil, and soybean futures contracts last Thursday. Funds were net buyers of CBOT soymeal futures, they added. 

Other sources: USWEAT

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