Wheat rebounds on lower-than-expected US crop ratings
CANBERRA/PARIS - Chicago wheat rose on Wednesday after U.S. crop ratings came in below market expectations, though prices remained within sight of a five-year low amid broadly favourable harvest prospects in the northern hemisphere and sluggish international demand. Corn futures also rose, similarly drawing support from a lower than expected U.S. crop conditions score. Soybeans edged lower. The most active wheat contract on the Chicago Board of Trade (CBOT) was up 1.0% at $5.34 a bushel by 1018 GMT. After a short-covering rally lifted wheat from a near five-year low of $5.06-1/4 earlier this month, actual or forecast rain in the U.S. Plains, northern Europe and China have underlined expectations for plentiful supply, fuelling a 2.6% slide in Chicago prices on Tuesday. But U.S. Department of Agriculture data released after the market close on Tuesday rekindled some doubts about crop conditions. The USDA's weekly report showed only 45% of U.S. spring wheat in good to excellent condition, below the lowest in a range of analyst expectations. For winter wheat, the agency rated 50% of the U.S. crop as good to excellent, down 2 points from a week earlier and beneath the average analyst forecast, though still the highest rating for this time of year since 2020. "This is the key reason wheat prices are trying to bounce this morning," CM Navigator analyst Donatas Jankauskas said of the USDA crop ratings. But global wheat demand is low and the risk to crop production will reduce further as northern hemisphere harvests ramp up, said Rod Baker, an analyst at Australian Crop Forecasters in Perth. "Hefty short positions mean there's still time for a rally," he said. "But each day that goes by it gets less likely." Commodity funds hold a large net short position in CBOT wheat and were net sellers on Tuesday, traders said. CBOT soybeans were down 0.1% at $10.61-1/2 a bushel and corn added 0.5% to $4.62 a bushel. Corn and soybeans are under pressure from expectations of a large crop in Brazil, with agribusiness consultancy Datagro this week increasing its forecasts for the country's 2024/2025 crops.
But the USDA surprised traders by rating 68% of the U.S. corn crop as good to excellent in its first condition ratings for the 2025 season, well below the average estimate of 73% in a Reuters analyst poll. Prices at 1018 GMT Last Change Pct Move CBOT wheat 534.00 5.50 1.04 CBOT corn 462.00 2.50 0.54 CBOT soy 1061.50 -1.00 -0.09 Paris wheat 203.25 2.00 0.99 Paris maize 198.00 0.00 0.00 Paris rapeseed 487.00 0.50 0.10 WTI crude oil 61.41 0.52 0.85 Euro/dlr 1.13 0.00 0.07 Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per metric ton.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
2 hours ago
- The National
Putin could participate in Iran talks and will retaliate against Ukraine attack, Trump says
President Donald Trump and Vladimir Putin spoke by phone on Wednesday, with the US leader saying the Russian President told him he wanted to participate in Iran nuclear talks and that he would retaliate against Ukraine's recent drone attack. In a post on his Truth Social platform, Mr Trump said that the phone call lasted more than hour, and that the two leaders agreed Iran could not have a nuclear weapon. "President Putin suggested that he will participate in the discussions with Iran and that he could, perhaps, be helpful in getting this brought to a rapid conclusion," Mr Trump said. "Time is running out on Iran's decision pertaining to nuclear weapons, which must be made quickly!" The post also said Iran has been "slow walking" talks. Iran and the US have been engaged in negotiations on a new deal that would put limits on its nuclear programme in exchange for sanctions relief. The US wants Iran to cease enriching uranium under a possible new deal, but Tehran says its programme is for civilian purposes and it has the right to continue. Earlier on Wednesday, Iran's supreme leader Ayatollah Ali Khamenei said a US proposal for a nuclear deal ran counter to Tehran's national interests, and that his country would not abandon uranium enrichment. Though Mr Trump said the call "was a good conversation", Mr Putin vowed to retaliate after Kyiv attacked Russian planes, and as a result, there would be no "immediate peace". Mr Putin "did say, and very strongly, that he will have to respond to the recent attack on the airfields", the US President wrote in his post. This is a stark turn around for Mr Trump, who took office this year on a promise to swiftly end the war in Ukraine. On Monday, delegates from Russia and Ukraine met briefly in Istanbul for a new round of talks. The day before, Kyiv unleashed a surprise drone offensive that hit Russian airfields across the country, taking out many heavy bombers and surveillance planes. The development comes after the White House on Tuesday confirmed that Mr Trump would attend the Nato summit this month, a meeting that is expected to be dominated by the war in Ukraine. The meetings will come shortly after Mr Trump is set to attend the Group of Seven leaders' summit in Canada, where allies are also expected to discuss ways to end the conflict. During a press briefing on Tuesday White House press secretary Karoline Leavitt said the President "remains positive at the progress" in the talks.
The National
2 hours ago
- The National
Global energy investments to hit record $3.3tn in 2025, despite uncertainty and geopolitical tensions
Investments in the global energy sector are set to hit a record $3.3 trillion in 2025 despite economic uncertainty and rising geopolitical tensions, the International Energy Agency said. A total of $2.2 trillion will be invested in renewables, nuclear energy, grids, storage, low-emissions fuels, efficiency and electrification, with $1.1 trillion to go into oil, natural gas and coal, the Paris-based IEA said in its World Energy Investment 2025 report on Thursday. The total is up about 2 per cent in real terms compared with 2024. "Open questions about the economic and trade outlook means that some investors are adopting a wait-and-see approach to new project approvals, but we have yet to see significant implications for spending on existing projects," it said. Part of the growth is fuelled by rapidly rising requirements for artificial intelligence-powered data centres around the world. Spending in the electricity industry, the main power source for data centres, is set to reach $1.5 trillion this year, the IEA said. "Rapid growth in spending on energy transitions over the past five years was kicked off by post-pandemic recovery packages and then sustained by a variety of economic, technology, industrial and energy security considerations, not only by climate policies," the agency added. The increased activity will be complemented by the doubling of investments into low-emissions power generation, the IEA said. Spending in the solar industry, in particular, is projected to hit $450 billion in 2025, making it the largest single item in the IEA's inventory of global investments, the report said. "Fierce competition among suppliers and ultra-low costs are seeing imported solar panels, often paired with batteries, become an important driver of energy investment in many emerging and developing economies," it added. Conversely, upstream oil investments are projected to be under $570 billion in 2025. That would be a 6 per cent decline, marking the first annual drop since the Covid-induced slide in 2020 and the largest since 2016, the IEA said. Global refinery investment is set to hit its lowest level in a decade. The decrease is being attributed to lower oil prices and demand expectations, amid economic uncertainties. Opec+, led by Saudi Arabia and Russia, has sought to prop up the market with last week's announcement of a third straight month of output increases in July. "Our initial expectation for 2025, based on company announcements, was that upstream oil and gas spending would be flat, but sentiment has since become more downbeat as oil prices came under pressure," the report said. Despite the expected record spending this year, the industry is still adopting a wait-and-see approach on new energy project approvals. The IEA acknowledged it has yet to identify "significant implications for spending on existing projects", executive director Fatih Birol said. Global tariffs, initiated by the administration of US President Donald Trump, would also be felt in America's oil and gas industry, as higher levies on imported steel and aluminium may put cost pressures on the sector, the IEA said. "Tariffs and inflation are affecting production costs – especially for basic materials," the report said. Experts have said that countries should realign their strategies to attain energy independence, which will help them cope with future uncertainties. "Today's energy decision makers are facing new geopolitical tensions and the risk of energy shocks remains high," the IEA said. Geographical shift Additionally, the shifting of energy investment along geographical lines is expected to have long-term implications, the report found. China remains the biggest global energy investor by a wide margin. Its share of global clean energy investment has risen from a quarter a decade ago to nearly a third at present, the IEA said. On the other hand, the US ha seen its spending on renewables and low-emissions fuels almost double in the past 10 years, but that is now expected to level off as Washington pulls back on policies that support the clean energy sector to promote the fossil fuel industry. The Middle East, meanwhile, continues to spend heavily on upstream oil and gas, with the region's share of global upstream investment set to hit a record 20 per cent this year, the IEA said. A large portion of this spending is to be used to expand projects for natural gas, including the Jafurah field in Saudi Arabia, the liquefied natural gasfields of Rub Al Khali in the UAE and the North Field developments in Qatar, it added.
Zawya
3 hours ago
- Zawya
Franc leading Swiss back to deflation vortex, asset stockpiling: Mike Dolan
LONDON - The supercharged Swiss franc is sucking Switzerland back into a deflationary vortex that its central bank will once again struggle to escape, possibly recycling a fresh wave of financial flows back out across the world. The Swiss franc, long perceived as a haven in stressful times, has seen its broad nominal exchange rate index surge 5% since U.S. President Donald Trump's return to the White House. But this is just the latest leg of a relentless appreciation of 20% in five years and 33% over the past decade. In a small open economy, that latest move has been enough to force deflationary relapse and the first drop in annual aggregate Swiss consumer prices in four years last month. In turn, the Swiss National Bank will almost certainly cut its already meagre 0.25% interest rate back to zero this month. A return to the negative interest rate era of the eight years through 2022 now seems almost inevitable further out. Markets already see a one-in-three chance of that happening as soon as the SNB's meeting on June 19. As the last experiment showed, there's a limit to how negative rates can go - mainly because it would be cheaper for big savers to vault their own money than have banks dock more than about 0.75% of deposits annually. And so the SNB may quickly have to resume selling francs and expanding its balance sheet once again to ward off deflation. It's been here before. The SNB's balance sheet ballooned almost 10-fold over the decade to 2022, hitting more than 1 trillion francs ($1.3 trillion) at its peak. While it has shrunk since to 843 billion francs, it remains bigger than annual Swiss GDP and more than four times that of the Federal Reserve's balance sheet as a share of the U.S. economy. Even though the SNB has appeared somewhat reluctant to resume outright franc sales recently, its top brass has pointedly refused to rule out either negative rates or another protracted bout of franc intervention. A sustained reversal of the franc's fortunes may allow the country to dodge the problem of course - with much of this year's franc surge coming against the ebbing dollar, unlike the euro/Swiss rate focus of a decade ago during the euro crisis. But if "safety" flows are at least part of what's driving the Swiss currency higher this year, then it's hard to see trade or geopolitical peace breaking out anytime soon. DEJA VU AND ZEITGEIST While this may all feel like deja vu in Switzerland, a slow-motion repeat of the "frankenshock" episode, it speaks to some of the biggest trends impacting markets today and has numerous implications globally. Rebuilding SNB reserves from today's already lofty levels could put upward pressure on a range of euro debt and dollar equity assets. The SNB remains a top 50 shareholder in all seven of the top U.S. big tech megacap stocks, for example, as well as euro zone government debt. The SNB diversified away from the euro in favour of dollars during the euro debt crisis over a decade ago and now holds an equal share of both euro and dollar holdings, as Barclays analysts point out. "A reversal of that trend would not be unprecedented," they said, referring to "jitters" around the prospect of the SNB diversifying away from the dollar in light of recent trade developments. While the SNB's trade-weighted franc index is dominated by a 42% euro weighting, the dollar still commands a 14% share and the dollar, yuan, yen and sterling combined account for about a third of the total. And so a sharp weakening of the dollar, dollar-priced commodities and other dollar-linked currencies still packs a punch for Switzerland regardless of relative stability on the euro. MANIPULATOR The other complication of a renewed intervention bout is that Switzerland finds itself firmly on the radar of the Trump Treasury's "currency manipulator" report, expected by analysts to be published this month. ING's Francesco Pesole reckons one reason the SNB has been holding off from intervention so far this year is precisely because it wants to avoid being labelled a manipulator by Washington and thus face a more extreme tariff onslaught. Pesole says that with Switzerland already in the "currency manipulator" report's sights due to the country's trade surplus with the U.S., its current account surplus more broadly and its long history of currency capping, the SNB may push negative rates as far as they can go before wading back into foreign exchange markets. "Should the (U.S.) Treasury's FX report be published before then, markets may increase their bets on a 50bp rate cut in June on the view that being added to the monitoring list further reduces the scope for FX interventions," he wrote. Unlike previous franc surges, when FX purchases were the obvious solution, the SNB may now find itself "damned if it does, and damned if it doesn't." The opinions expressed here are those of the author, a columnist for Reuters (By Mike Dolan; Editing by Jamie Freed)
