Futures on Chicago wheat surged almost 10% after the 'bottom' from rollover and are gaining today, for a third consecutive session. Wheat traders are pricing a decline in U.S. winter crop condition and dryness in Russia market. Singapore traders cited by Bloomberg told that markets still see an upside for wheat as dry weather is threatening Russian and U.S. crops. What's more, large speculators are still short on wheat, and any worries over supply may force funds to cover short positions.
Latest U.S. Department of Agriculture’s (USDA) weekly crop report progress showed 50% of U.S. wheat in good-to-excellent condition. The result came in 4 percentage points below the average estimate of Reuters analysts. As for now, the ratings are still the highest since 2020, but dry weather may change this scenario. Also, dry weather in Russia influence markets. Russian attacks on the Ukrainian port (southern Odessa) region on Friday caused also another supply-stress to the market. The missile strikes destroyed grain storage facilities and foodstuffs.
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Wheat futures erased gains slightly after reaching the psychologically important resistance zone at $600 per bushel.
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