US rain forecast pressures wheat as other grains prove buoyant

Wheat prices, weighed by a wetter outlook for the US Plains, nearly missed out on a firm day for grain prices, which found support from buoyancy lent to oil markets by Middle East worries.

US President Donald Trump said that the war in Iran was nearly over, telling the world to prepare for an “amazing two days”, as a delegation from Pakistan, which has been mediating between Tehran and Washington, arrived in the Iranian capital.

Nonetheless, Brent crude futures for June-26 ticked up 0.9% in late deals, to $95.63/Bbl, amid lingering concerns over the dearth of tankers passing through the Strait of Hormuz.

Although vessel flows have increased, they remain a fraction of the levels of 130 ships or more which navigated the strait daily before the war.

Other grains found spillover support from oil. Corn futures for May-26 added 1.8% in midday deals in Chicago, buoyed too by ideas of an early start to the dry season in central Brazil, tempering optimism over prospects for the country’s safrinha corn crop.

Among oilseeds, rapeseed futures for May-26 added 1.9%, and Chicago soyoil for May-26 rose by 1.7%, supported as feedstocks for making diesel, linking them to higher crude oil values.

Chicago soybean futures for May-26 gained 1.0% to return above their 50-day moving average, backed as well by ideas that Mr Trump’s optimism over Iran improved the chances of a visit to Beijing, which is expected to trigger a fresh batch of Chinese orders of US soybeans.

US wheat prices eventually found support too, although were late to attract buying, after some weather forecasts earlier on Wednesday added rains to the western US Plains weather outlook for late April.

However, with the forecast rainfall still a week out, and later weather model runs anyway less generous, Chicago soft red winter wheat for May-26 recovered lost ground to stand up 0.4%. Hard red winter wheat for May-26 rebounded to show 0.6% gains.

The recovery came too late to buoy European contracts which, faced too with strengthening currencies and growing Russian competition on export markets, ended lower.

Paris milling wheat for May-26 traded 0.8% down in late deals, while the London November-26 contract settled 0.6% lower.