Wheat futures fluctuated in the U.S. as traders faced a mounting squeeze on global grain supplies against a murky demand outlook.
The French Agriculture Ministry downgraded its wheat-harvest outlook, and grain quality is also a concern. That adds to lower output expectations in Russia. Drought has slashed spring wheat prospects in China, and rain damaged crops in North America, while the use of wheat in animal feed has surged.
Nevertheless, rising crop prices soften demand in some key buyers. Top wheat importer Egypt booked a lone cargo at a tender on Monday, its smallest volume in nearly a year. Turkey purchased one sought 515,000 tons of feed barley and Pakistan cancelled less than half of the wheat ordered at a tender late last week. At the same time, the relentless global pandemic is raising questions about short-term grain shortages.
'Concern about rising Covid - 19 cases around the world could limit consumption rates in the coming weeks, Jacqueline Holland, an analyst for Farm Futures, wrote in a note.
Wheat fell on Wednesday after recent gains. In Minneapolis, benchmark futures had climbed 11% in the last month through Tuesday and spring wheat in Chicago had gained almost 10% and recently reached the highest in eight years.
'Some consumers balk at higher prices, said Tobin Gorey, a strategist with the Commonwealth Bank of Australia, referring to wheat. 'And that balk has a few traders worried that maybe the gains have been too much, too soon. We are a little skeptical that the market is cutting wheat harvest estimates.
Spring wheat led grain losses in the U.S. with futures down as much as 2.3%. Hard winter wheat fell 2.1% and benchmark soft winter wheat 1.4%. Corn and soybeans also fell.