Wheat hits 3-week high on French crop worries, Black Sea tensions
Chicago wheat futures rose to a three-week high on Monday amid concerns over the French crop and tensions in the Black Sea, although ample supply kept prices near multi-year lows.
Soybean and corn futures fell slightly.
The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.4% at $5.56-3/4 a bushel by 0231 GMT after touching $5.60 in early trade, its highest since March 5.
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Farm office FranceAgriMer said on Friday that 66% of French soft wheat was rated as in good or excellent condition by March 18, down from 94% a year ago.
Russia, meanwhile, launched an attack against energy infrastructure in Ukraine, a significant grain exporter.
"The end of last week saw some short-covering as the market reacted to news of lower condition ratings in French soft wheat," said Andrew Whitelaw, an analyst at Australian agricultural consultancy Episode 3.
Wheat futures, along with soybeans and corn, are exposed to short-covering rallies after speculators built up their biggest net short position in years, and funds were net buyers of CBOT wheat on Friday, traders said.
"The continued uncertainty in the Black Sea region is keeping the market testy," Whitelaw said. "In only the past week, there have been attacks on ports, Russian farmers reducing wheat acreage and potential of tariffs on grain into Europe."
Russian farmers say they are considering cutting wheat acreage in favour of higher-margin crops like soybeans and peas, though analysts say they do not see this as a major threat to the 2024 crop.
The European Commission, meanwhile, proposed tariffs on grain from Russia and Belarus, in part to placate farmers who have protested cheap imports.
However, cheap grain supply from Russia, which has seen two consecutive large harvests and expects a third this year, has kept pressure on prices.
In other crops, CBOT soybeans Sv1 were down 0.2% at $11.90-3/4 a bushel and corn Cv1 fell 0.2% to $4.38-1/2 a bushel.
Like wheat, these contracts have risen in recent weeks from their lowest levels since 2020 and investors remain bearish.
The US Department of Agriculture (USDA) is due to publish a planting intentions report on Thursday. Analysts estimate that US farmers will plant more soybeans and less corn and wheat this season than in the previous one.
Heavy rainfall that battered Argentina at the start of this month should ease up in the coming weeks, the Rosario Stock Exchange said, which could help crops recover and farmers harvest their plants as soil begins to dry. Argentina is a major soy exporter.
