Chicago wheat futures slipped on Thursday, pulling back from a one-month high reached the previous day as the U.S. dollar steadied and a Russian consultancy raised its wheat production outlook, tempering recent bullish momentum.
The most actively traded wheat contract on the Chicago Board of Trade (CBOT) fell 0.6% to $5.46 per bushel as of 0720 GMT. Soybeans also edged lower, down 0.4% to $10.58-1/4 per bushel, while corn eased 0.5% to $4.58-3/4 per bushel.
The retreat follows a notable rally earlier in the week that saw wheat prices surge to $5.56-1/4 on Wednesday, driven by a combination of factors including a declining U.S. dollar, deteriorating crop conditions in key exporters like Russia and China, and an unexpected drop in U.S. wheat quality ratings. The weaker dollar had improved the competitiveness of American agricultural exports, attracting international buying interest.
However, the rally hit resistance as the dollar rebounded modestly on Thursday, limiting export appeal. Simultaneously, a Russian agricultural consultancy revised its wheat production estimate upward, easing supply concerns and putting downward pressure on global prices.
Earlier this month, CBOT wheat hit a five-year low of $5.06-1/4 on May 13, reflecting abundant global supply and subdued demand from major importers. The recent spike in prices was largely attributed to short-covering by traders reacting to emerging weather threats and tightening crop ratings in the U.S.
“People are starting to notice just enough things to say hold on, there’s been no risk premium built into these wheat prices,” noted an analyst at a grain trading firm in Australia.
The market will now look to updated weather forecasts, global production reports, and currency movements for further direction, as traders assess whether the recent uptick in wheat was a temporary bounce or the beginning of a more sustained recovery.
