Wheat Slumps to Lowest Level in a Week Due to Russian Export Pressure

On Tuesday, Chicago wheat experienced a decline of more than 1%, reaching a one-week low, primarily due to the influx of inexpensive Russian grain into the market. Additionally, concerns over supply disruptions from Ukraine eased as ships were able to dock in the war-torn country.

Corn and soybean futures also saw declines as newly harvested supplies entered the market in the United States.

The most-active wheat contract on the Chicago Board of Trade (CBOT) fell by 1.4% to $5.83 per bushel, as of 0330 GMT. It reached its lowest point since September 12 at $5.82-1/4.

Corn prices slid by 0.4% to $4.69-3/4 per bushel, while soybeans gave up 0.4% to $13.11-1/4 per bushel.

IKAR, an agriculture consultancy, reported that the price of 12.5%-protein Russian wheat for free-on-board (FOB) delivery in October fell to $235 per metric ton last week. SovEcon, another agriculture consultancy, estimated that Russia's monthly shipments for September would reach 4.9 million tons, compared to 4.2 million tons the previous year.

Additional downward pressure on prices came from the news that two cargo vessels successfully arrived in Ukraine on Saturday, using a temporary corridor to access Black Sea ports and load grain. This occurred despite the collapse of a safe-passage agreement with Russia earlier in the year.

Analysts at StoneX noted that "funds view the lack of action by the Russians as a sell signal." Commodity funds were reported as net sellers of Chicago soybean, wheat, corn, soyoil, and soymeal futures on Monday.

Shifting attention to corn and soybeans, data from the U.S. government indicated that the U.S. corn harvest was 9% complete by Sunday, while the soybean harvest was 5% complete. Both figures were ahead of the five-year averages. However, the condition ratings for crops remained concerning, with only 51% of corn and 52% of soybeans rated as "good to excellent." These ratings reflect the impact of dry conditions.

Meteorologists and analysts also raised concerns about Brazil, where a significant portion of the country was expected to experience extreme heat during the week. This extreme heat was anticipated to hamper soybean planting in the region.

In summary, Chicago wheat prices declined to a one-week low due to the influx of low-cost Russian grain into the market and the improved docking situation in Ukraine. Corn and soybean futures also saw losses as newly harvested supplies entered the U.S. market. Concerns about crop conditions in the United States, marked by dry conditions and low ratings, added to the downward pressure on prices. Additionally, extreme heat in Brazil raised concerns about soybean planting in that region. These factors collectively contributed to the fluctuations in the agricultural commodity markets.