On Monday, wheat rose as Indian production was reduced for this crop season due to unseasonal rains and hail storms.
Wheat futures for May delivery increased by 1.03% to $681.80 per metric ton on April 10’s Asian afternoon session.
In the crop season of 2022-23, its 104.24-million-ton output decreased to 102.89 million tons, which was estimated in March 2023.
According to reports, unfavorable rains flattened standing crops in other regions. Based on analysts’ statements, these rains and hailstorms ruined the record production they were looking forward to.
However, more robust yields and acreage can create a more comfortable situation for India.
Also, several rounds of heat waves in plantations of wheat affected crops last year. Besides, when overexposed to heat, the pods would shrink.
Due to a full-blown war between Russia and Ukraine in 2022, export demand for the commodity surged. This resulted in higher prices of the staple food grain.
Moreover, global wheat prices were volatile as Moscow and Kyiv were significant suppliers. This led India to do more than restrict exports.
In addition, India altered its export policy to handle overall food security while meeting the needs of neighboring countries. As a result, they put the crop under the prohibited category.
After that embargo, they banned deliveries of wheat flour and other related products.
Black Sea Grain Deal Caused Wheat to Jump
After the Kremlin’s warning to bypass a grain deal, Chicago wheat futures increased by more than 1.00% on Monday. The threat supported its prices.
According to analysts, the growing tensions in the Black Sea can help CBOT wheat contracts.
On Friday, Putin’s government threatened to go around the agreement unless they removed the hurdles for its agricultural exports.
Based on an official from Moscow, there was a failure in establishing the deal’s terms. However, it was mentioned that the country dealt with it when Western countries eased the obstacles for agricultural deliveries.
Also, grain traders are waiting for the monthly US agricultural report due on Tuesday.