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Wheat Prices Rise on Strong Demand, but Monthly Losses Remain

Chicago wheat prices are on track for their first weekly gain in a month, driven by increasing demand, according to a report by Reuters. However, the grain is still poised to record its largest monthly decline since June 2022, as the northern hemisphere harvest and improved planting conditions in Argentina continue to weigh on prices.

Front month wheat contract on the Chicago Board of Trade (CBOT) (Wv1) was l $5.55 a bushel on Friday.

The recent price increase is linked to robust export activity, with Egypt and Algeria emerging as key importers of US wheat.

"Healthy wheat exports, with Egypt and Algeria among the top importers, were reported on Thursday, indicating strong demand," Reuters reports.

Traders are anticipating the release of the USDA's quarterly stocks report for June and its 2024 acreage report, both scheduled for Friday.

"Traders were positioning ahead of the release of the USDA data," Reuters notes.

Despite the recent gains, wheat prices have fallen by almost 14% this month, reflecting the bearish sentiment in the market.

"Reports of rains in northern Argentina, allowing for wheat sowing, have contributed to bearish market sentiment, with the USDA World Agricultural Supply and Demand Report Estimates for June increasing its outlook for U.S. wheat production by 17 million bushels from the month prior," according to a report from BMI, a unit of Fitch Solutions.

The harvest of wheat crops in major northern hemisphere exporters is also contributing to seasonal pressure on prices.

Corn and Soybeans Poised for Weekly Losses

Meanwhile, corn and soybean futures are poised for weekly losses despite recent gains. The International Grains Council raised its forecast for global corn production on Thursday, driven by an improved outlook for Brazil's crop.

The most-active Chicago September corn contract plunged to contract lows on Friday following the USDA's latest report, which revealed higher-than-expected corn acreage planted due to favorable spring weather. This suggests a potential increase in corn supply, putting downward pressure on prices.

Wheat Planting in Argentina Advances

Wheat planting for the upcoming harvest in Argentina has progressed rapidly due to recent rainfall across key agricultural areas. The European Commission has also raised its forecast for the European Union's main wheat crop this year, along with its forecast for EU wheat exports in both the current and next seasons.