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U.S. wheat futures surged Friday to their highest finish since August, as a “historic freeze” looks to threaten production in Russia, which is among the world’s largest wheat producers.
Reports said three of Russia’s key grain-growing areas declared a state of emergency this week due to frost that may have caused severe damage to crops.
Agriculture research firm SovEcon said recent frosts have compounded problems already faced at Black Sea growing areas.
CBOT wheat futures (W_1:COM) for July delivery settled +3.8% to $6.61 3/4 per bushel, while July corn (C_1:COM) closed +2.6% to $4.68 1/2 per bushel and July soybeans (S_1:COM) finished -0.9% at $12.19 1/2 per bushel.
ETFs: (NYSEARCA:WEAT), (NYSEARCA:CORN), (NYSEARCA:SOYB), (DBA), (MOO)
CBOT corn enjoyed a boost after the release of the May WASDE report from the U.S. Department of Agriculture, which upwardly revised expectations for consumption of U.S. corn to 14.81B bushels in 2024, 100M bushels more than 2023.
WASDE forecast U.S. production of soybeans in 2024 would reach 4.45B bushels and corn output of 14.86B bushels in 2024, both not far off record-high levels.
The USDA also estimated world wheat stockpiles for the 2024-25 season totaled 253.6M metric tons, below the average estimate and the lowest level in eight years, global corn supplies of 312.3M, which were ~2% below the average estimate.
Meanwhile, CBOT soybean oil surged 4.2% Friday, the most since July, on speculation the Biden Administration will include used cooking oil from China on the list of tariffs expected to be announced in the coming days.
The U.S. reportedly is poised to raise tariffs on goods produced in China such as electric vehicles, and traders bet Chinese used cooking oil would be included; the U.S. market has been flooded with supplies in recent months to make biofuel, hurting profits for agriculture processing companies that crush soybeans.