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Sunday, February 25, 2024

Wheat climbs 2% on Moscow attack, soybeans rises for third session

SINGAPORE: Chicago wheat jumped almost 2% on Friday, while corn gained ground as a drone attack on Moscow raised fears of further escalation in Russia-Ukraine war, which could reduce world grain supplies.

“There has been an explosion in Moscow which is raising concerns over wheat supplies and supporting prices today,” a Singapore-based grain trader in an international trading company said.

A Ukrainian drone attack damaged a building in central Moscow earlier in the day, causing a blast that was heard across the business district of the Russian capital, Russian officials said.

A Reuters witness who was in the area described it as “a powerful explosion”. Russia is the world’s biggest wheat exporter. Soybeans climbed more than 1% with additional supports from forecasts of dryness in key parts of the US Midwest.

“For soybeans, next two weeks are likely to be dry in the US crop belt which could hurt the crop as it is going through a key phase of development,” the trader said.

The most-active wheat contract on the Chicago Board of Trade (CBOT) climbed 1.8% to $6.26 a bushel, as of 0325 GMT and corn rose 1% to $4.90-3/4 a bushel. Soybeans added 1.2% to $13.46-1/4 a bushel.

Soybeans have climbed almost 3% this week, on track for their first weekly gain since late-July, while corn has risen 0.8% this week. Wheat is largely unchanged this week.

The United States has little room for crop losses due to unfavourable weather as the government has already projected tight soybean supplies, analysts said.

US farmers will harvest corn and soybean crops this autumn, and August is the key month of development for soybeans.

Expectations of India importing wheat supported prices. India is in talks with Russia to import wheat at a discount to surging global prices in a rare move to boost supplies and curb food inflation ahead of state and national elections next year, according to four sources.

Although India needs only 3 million to 4 million metric tons of wheat to plug the shortfall, New Delhi might consider importing 8 million to 9 million tons of wheat from Russia to have a far bigger impact on prices, another source said.

In news, the International Grains Council on Thursday raised its forecast for 2023/24 global corn production, with an improved outlook for Ukraine’s crop only partially offset by a downward revision for China.

The inter-governmental body, in a monthly report, put global corn production at 1.221 billion metric tons, up from a previous forecast of 1.220 billion tons and the prior season’s 1.160 billion tons.

Heavy rainfall linked to the weather phenomenon known as El Nino likely will kick off in Argentina in October, experts said on Thursday, which could affect the corn planting season in some parts of the country.

Commodity funds were net buyers of CBOT corn, soybean and soyoil futures contracts on Thursday, and net sellers of wheat and soymeal futures, traders said.

Wheat climbs 2% on Moscow attack, soybeans rises for third session

Source: Brecorder

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