After two days of deep losses, Chicago wheat futures rebounded on Thursday, with support from dry weather that is expected to reduce yields in Russia and Australia, Reuters reports.
The most-active wheat contract on the Chicago Board of Trade was up 0.7% at $4.94 a bushel by 1118 GMT, having lost more than 5% in the two previous sessions.
“Wheat is finding support on continued dryness in Russia,” brokerage firm Allendale said in an analyst note.
Earlier this week, Russian agricultural consultancy SovEcon downgraded its forecast for Russia’s 2019 wheat crop due to dry weather in May and could cut it further if the weather remains dry this month.
Dry weather is also a concern in Australia.
“The next three months are expected to be dry in much of Australia and people have started to reduce estimates for production in the Black Sea region due to the dry weather,” said one Singapore-based trader.
In contrast, the outlook for crops in western Europe has improved after recent rains and September milling wheat futures in Paris was down 0.25 euros or 0.1 percent at 178.75 euros a ton.
Germany’s 2019 wheat harvest will increase 21.9% on the year to 24.70 million tonnes as hopes of a recovery continue after drought caused massive harvest damage last year, the country’s association of farm cooperatives said on Wednesday.
“The recent rainfall has prompted the German Farmers Cooperative to slightly raise its forecast for this year’s wheat crop in Germany,” Commerzbank said in a market note.
