CHICAGO WHEAT futures fell for the first time in a week yesterday, as traders said the market’s surge to a 22-month high already reflected the damage caused by the worst Russian drought in 130 years.
Wheat fell by 1.6 per cent, the biggest daily percentage decline in more than three weeks, dragging down corn and soy futures. Both markets had been pulled higher as wheat surged more than 50 per cent since early June.
Russia cut its grain crop forecast in line with analysts as the worst drought in 130 years spread to more regions, with no let-up in sight over the coming week.
The drought in the Black Sea region is expected to hit world wheat trade, with key exporters gaining market share as drought-stricken countries reap smaller crops. Traders said some Black Sea shipments to Asia had already been held up.
However, some wondered if the price rally was running out of steam. “With prices as high as they are, you have to realise there has been a tremendous amount of crop loss already dialled into the market,” said Don Roose, president and analyst for US Commodities. – (Reuters)
