Wheat falls in second straight day of profit-taking; USDA cuts world wheat estimate

Wheat falls in second straight day of profit-taking; USDA cuts world wheat estimate

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Wheat futures closed lower for the second straight day on accelerated profit-taking, as the recent surge in prices begins to be perceived as a drag on world demand.

Chicago wheat (W_1:COM) for July delivery settled -7.1% to $11.10 1/4 per bushel, while May corn (C_1:COM) -2.7% to $7.33 per bushel and May soybean (S_1:COM) -1.1% to $16.71 3/4 per bushel.

ETFs: WEAT, CORN, SOYB

“There are now signs that demand is being slowed by the high price level,” Commerzbank analysts wrote, saying Algeria is believed to have extended a tender that was originally due Tuesday until Wednesday, and Tunisia rejected all offers and made no purchases because prices were seen as too high.

The wheat contract had closed limit-down before the release of U.S. Department of Agriculture’s monthly WASDE report, which contained no major surprises; it reduced its 2021-22 world wheat export estimate by 3.6M tons to 203.1M tons.

So far, the USDA forecast does not anticipate the U.S. will increase wheat exports to help meet demand, and reflects the current wheat crop that has already been harvested, Teucrium managing director Jake Hanley said. “What the report does not address is the winter wheat crop that is in the ground now, that may or may not be harvested. A drawn-out [Russia-Ukraine] conflict may mean farmers and field laborers are off fighting a war vs. tending the fields.”

“The market is going to look ahead to the planting intentions report,” Top Third Ag Marketing’s Dan O’Bryan told Reuters. “As far as U.S. production, that’s going to be the real story.”

Smacked by shipping disruptions, surging input costs and concerns about new plantings in Ukraine, Goldman Sachs sees global grain prices rising further in the “sharpest shock” since the 1970s.

Originally Posted on: https://seekingalpha.com/news/3811443-wheat-falls-in-second-straight-day-of-profit-taking-usda-cuts-world-wheat-estimate?source=feed_tag_commodities
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