Wheat prices are climbing up from the recent slump as Japan lifts ban on the US wheat imports. Japan’s lifting of the ban has increased the demand for Wheat. But, the Corn prices are decreasing due to continued good weather prospects in US. This has increased the speculations of more supply in the coming days bringing down the corn prices.

Last week on Thursday, the Wheat prices in CBOT for the September delivery declined by 0.27% to $6.5150 a bushel. While the milling wheat for November delivery in Paris dropped by 0.5% to €189.25 a tonne. But, later on Friday, the CBOT wheat pared back its losses, as it rose by 1% to trade at $6.5575, on the Chicago Board of Trade as of 05:55 EDT.

On the other hand, Corn futures for December dropped by 0.1 % to trade at $4.785 a bushel in Chicago, on Friday. On Tuesday this week, Corn extended its losses for the December delivery as it fell by 0.5 percent to $4.7525 a bushel. Overall, Corn declined by 6.3% for the month of July.

On the same day, Wheat continued its incline as it rose for the fourth consecutive day to post a 0.35 % gain for the September delivery trading at $6.5763 a bushel. On Thursday August 1st, Corn for the December delivery dropped to $4.734a bushel from the previous day’s price of $4.7525 a bushel, in CBOT at 13:55 BST.

Corn prices are on a downtrend due to the continued good weather forecasts for the Corn crops in the US, the world’s biggest producer of corn. According to the MDA weather services, US Midwest will experience thunderstorms that will ensure adequate rainfall to keep the temperatures cool. This will avoid any possible heat stress on the corn and soybeans crops. This increased the speculations for a rise in global supply due to increased production and consecutively, dragged down the Corn prices.

Meanwhile, the Wheat prices are on an uptrend due to various factors contributing to an overall increase in the global demand. Egypt, the largest Wheat importer, is increasing its wheat import for the September month by 1 to 10 shipments. China one of the biggest wheat producers has increased its wheat import in the recent weeks, as rainfall affected its crop growth.

Moreover, Russia’s Grain Producers Union has declared that its output for this year will be reduced to 45 million from previous target of 48 million tonnes of wheat due to drought. Also, Japan this week has lifted its import ban on US wheat, increasing the demand outlook for Wheat crops. All these factors have pushed up the global demand outlook for Wheat crops and caused the Wheat prices to soar this week.

Thus, Wheat underpinned by an increase in global demand will probably continue its price rally. And Corn is bound to trade lower with the supply currently exceeding the demand as US is on track to reap record harvests this year.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.