Wheat dropped for a third day to the lowest level since early June as grain exports continued from Russia and Ukraine even as tensions remain in the Black Sea region.
Benchmark futures in Chicago traded as much as 3.1% lower after sliding 1.9% on Monday. Russia opened fire on a ship over the weekend to force the vessel to stop for checks, a continuation of hostilities in the key trade route after Ukrainian drones attacked Russian vessels earlier this month.
The US Department of Agriculture raised its estimate for shipments from Russia on Friday and lifted its estimate for US wheat stocks at the close of the 2023-24 season by more than analysts had expected on average.
The fact that exports have continued is one of the key reasons for the decline in prices, according to CRM Agricommodities. “Focus returned to Friday’s Wasde report, which was broadly viewed as somewhat bearish,” the consultant said in a a report.
Wheat has about 20% this year due to bumper harvests.
Prices were pressured on Tuesday by good crop conditions in spring wheat, robust harvest pace for US winter wheat and the overseas sentiment, said Jacqueline Holland, an analyst at Farm Futures
Plentiful Russian exports are “keeping global buyers well-stocked for the time being,” she said.
The USDA raised its estimate for Russian wheat exports to 48 million metric tons for the 2023-24 season. That means almost a quarter of the world’s trade will now come from Russia.
--With assistance from Áine Quinn.
