GENEVA, May 14 (Reuters) - Weather hiccups in major cereals producers have cast a doubt on prospects of a global grain glut and made fundamentals regain their status of key market drivers after being surpassed by politics, notably the war in Ukraine, analysts said.
Wheat prices in Chicago gained 33% in the past two months after falling to a four-year low, supported by mounting concerns on lower volumes even as analysts still expect record-high crop this year. Corn prices also turned higher although at a lesser extent.
"Between the Russian frost problem, too much rain in Europe where some fields were flooded, bugs in Argentina and delays on U.S. plantings, mother nature is very angry right now and these elements are creating turmoil in the market," Dan Basse, president of AgResource consultancy told Reuters ahead of the GrainCom conference in Geneva.
"Looking forward the next two, or three weeks will be key for crops. We should have a clearer picture by June 1," he added.
May frosts in some key-growing regions of Russia, the world's largest wheat exporter, and drought in the southern regions of the country prompted analysts to lower their crop and export forecasts although the harvest is still expected to be abundant.
Meanwhile in Argentina, the world's No. 3 corn exporter, a severe leafhopper insect outbreak has caused major damage to corn fields the Rosario grains exchange (BCR) said on Friday.
In the European Union, the Commission expects soft wheat exports to remain stable next season despite a lower harvest seen at a four-year low.
AgResource estimates the world's wheat harvest, including soft wheat and durum output, at 789 million metric tons. The estimate is slightly above last year but down 9 million tons below the U.S. Department of Agriculture (USDA) forecast last week.
"European and U.S. farmers will be the main (beneficiaries) of what is happening. Losers will be importers like Egypt's (state buyer) GASC and Chinese buyers," Basse said.
Separately, in Paris, François Luguenot, a grain analyst and contributor to French commodities research firm CyclOpe warned that geopolitical risks remained despite the renewed focus on crop fundamentals as the price driver.
"If tomorrow things flare up in the Black Sea and the boats no longer come out, that's hot. If we can no longer cross the Strait of Panama or the Suez Canal, it's hot too. And that, all of that for the moment is under the rug," he said.
(Reporting by Sybille de La Hamaide, additional reporting by Gus Trompiz in Paris; Editing by Aurora Ellis)
