US sees tighter world grain supplies, sending prices higher

Global grain supplies will be tighter in the coming season, setting the stage for higher prices for agricultural commodities as economies are still coping with stubborn inflation, according to a key US forecast.

World wheat stockpiles for the 2024-25 season were estimated at 253.6 million metric tons, below the average estimate and the lowest level in eight years, according to the US Department of Agriculture's first such forecast.

The outlook comes amid small on-hand grain supplies and worries that adverse weather will hit oncoming harvests, with cold weather in top wheat-exporting Russia among the concerns. Russia will remain the world's top exporter, but is expected to ship less in the season beginning July 1 than the previous one, according to the USDA.

World corn supplies of 312.3 million tons came in about 2.1% below the average estimate.

Wheat futures surged as much as 3.7% to $6.6075 a bushel, the highest intraday in about nine months. Corn climbed as much as 2.6%.

Damaged Soybeans

The agency lowered its estimate for Brazil's current soybean harvest 154 million tons, down 1 million tons from last month. The agency made the cut due to flooding in Rio Grande do Sul state. Still, the soybean crop that farmers in Brazil, the world's top producer, will start planting later this year could reach a record 169 million tons, according to USDA.

Wheat futures surged as much as 3.7% to $6.6075 a bushel, the highest intraday in about nine months. Corn climbed as much as 2.6%.

Damaged Soybeans

The agency lowered its estimate for Brazil's current soybean harvest 154 million tons, down 1 million tons from last month. The agency made the cut due to flooding in Rio Grande do Sul state. Still, the soybean crop that farmers in Brazil, the world's top producer, will start planting later this year could reach a record 169 million tons, according to USDA.