Chicago wheat futures at multi-year high, soybeans strengthen

Chicago wheat futures climbed Friday, nearing the nine-year peak reached earlier this week and posting their second consecutive weekly gain as a decline in global supplies supported the market, MarketScreener reports with reference to Reuters.

Soybean prices rose and were ready to continue upward for the second consecutive week.

"Prices in Europe and the Black Sea region have reportedly increased and in some cases reached season high levels. The action still indicates consolidation at higher price levels established over the past week or so," comments Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, on wheat prices in the major producing countries.

The most active wheat contract on the Chicago Board of Trade (CBOT) rose 0.4% to 8.34-1/4 USD/bushel by 03:41 GMT. Prices reached their highest since December 2012 on Wednesday. Soybeans have also added 2.5% this week and corn has lost 0.5%.

IGC on Thursday revised down its global wheat production forecast for 2021/22, in part due to Iran's weaker crop outlook. In its monthly update, the intergovernmental body lowered its 2021/22 world wheat crop forecast by 4 mln t to 777 mln t.

"Heavy rains are a threat to crops in Australia, flooding has disrupted export routes in Canada, and drought conditions are raising first doubts about production in the United States and the Black Sea region," the message reads.

Strategy Grains, a consulting firm, sharply reduced its forecast for European Union wheat demand in 2021/22, as high prices, according to experts, are undermining exports and forcing industrial processors to switch to corn.

Previously reported that world grains production in 2022/23 may decrease as a consequence of higher energy and fertilizer prices.

In its November report, the USDA projects wheat production in Ukraine in 2021/22 at 33 mln t, corn at 38 mln t.