Strong Supply Continues to Hit Grain Prices, International Tender Prices in Focus

A roundup of key agricultural commodity markets for the week of Sept. 25-29 by Dow Jones Newswires in London.

GRAINS & OILSEEDS

Strong supply of wheat and corn is continuing to pressure prices, with ample exports from the Black Sea in particular hitting markets.

Prices for wheat in Chicago are down more than 10% so far this quarter, with more weakness expected, according to analysts.

"Competitive Black Sea supplies weighed on prices, though concern over dry weather in Australia and Argentina limited losses," analysts at the U.K.'s Agriculture and Horticulture Development Board said in a note. "The U.S. dollar strengthening also played into movements last week."

The dollar is likely to remain in focus, with worries over further rate hikes from central banks still present.

"The Fed is hawkish, and the macro environment is bearish ahead of a possible U.S. government shutdown next weekend," Peak Trading Research said in a note.

Peak added that the weather in the U.S. was also looking good for growing, likely to add further pressure to prices. Peak said that markets will be watching Friday's PCE inflation reading, with a strong inflation print likely to mean more rate hikes and a stronger dollar.

AHDB also noted that in international tenders last week, shipments to Egypt and Algeria from Russia were quoted at the same price. "Some commentators suggest this represents an unofficial floor price," it said.

Chicago-wheat futures are 0.5% higher to $5.83 a bushel on Monday. Corn was down 0.5% $4.75 bushel.

SOFT COMMODITIES

In terms of softs, El Nino remains key, with sugar prices having hit a 12-year high last week at 28 cents a pound, over output concerns in India. Prices have since lowered but Green Pool highlighted that this was now the fifth week in a row that New York prices were up.

Prices for arabica coffee were 0.4% lower at $1.51 a pound on Monday, raw sugar was down 2.4% to $0.27 a pound while cocoa was down 2.3% to $3,500 a metric ton.

Write to Yusuf Khan at [e-mail]

(END) Dow Jones Newswires

09-25-23 1205ET