CBOT wheat futures extended their upward rally for a fifth straight session this morning amid weather disruptions in one of the top-growing countries, Argentina, along with growing tensions between Russia and Ukraine. Meanwhile, excessive rain has slowed down the harvest and sowing in Western Europe, while dry weather conditions in Russia have also hampered the plantings.
In its weekly report, the Buenos Aires Grain Exchange lowered Argentina’s wheat production forecast to 19.5mt for the 2024/25 season, down from 20.5mt estimated earlier. However, it is still 31% higher than the previous season. The decline in production estimates is largely due to continuous heat waves impacting wheat yields. Meanwhile, the dry conditions in the country have also impacted the early corn plantings significantly, while some farmers intend to shift from corn plantings to soybean. However, sowing estimates for both crops remain unchanged (corn plantings seen at 6.3m hectares), while corn plantings were reported to be 18.6% complete as of 10 October, higher than 13.7% seen at the same stage last year.
USDA released its weekly grains export sales report which shows that US grain sales remained weak for the week ending 3 October. Weekly export sales of corn were down to 1,222.1kt for the week, lower than the 1,684.1kt a week ago and 2,427.4kt the same period last year. This was also lower than the average market expectations of 1,291kt. Similarly, soybean exports fell to 1,255.9kt, lower than the 1,444.5kt reported a week ago but higher than 808.5kt a year ago. The market expected a number closer to 1,369kt. Meanwhile, US wheat shipments stood at 439.1kt, lower than the 443.7kt reported a week ago but higher than 273.1kt reported a year ago and the average market expectations of 400kt.