SINGAPORE: Chicago wheat futures jumped nearly 7% on Friday, taking the weekly gain to more than 40% as Russia’s invasion of Ukraine entered a second week, curbing supplies from one the world’s top grain exporting regions.
Corn rose to its highest in a decade, while soybeans edged higher.
“We didn’t expect such a sharp rally in prices,” said one Singapore-based grains trader at an international trading company which sells wheat to millers in Asia.
“Buyers are not making any big purchases as of now but eventually they will have to return to the market to cover supplies.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) rose 6.6% to $12.09 a bushel, as of 0410 GMT, the highest since March 2008.
Corn gained 2.4% to $7.66 a bushel and soybeans added 0.2% to $16.70-3/4 a bushel.
For the week, wheat has risen 40.1%, corn is up 17% and soybeans have added 5%.
Ukrainian ports will remain closed until Russia’s invasion ends, the head of Ukraine’s Maritime Administration said on Monday, adding that the port of Mariupol has sustained damage from Russian shelling.
Russia invaded Ukraine on Feb. 24, calling its actions a “special operation”.
Unprecedented Western financial sanctions against Moscow have reduced supplies from Russia, the world’s biggest wheat exporter.
Russia and Ukraine account for about 29% of global wheat exports, 19% of corn exports and 80% of exports of sunflower oil, which competes with soyoil.
Demand for US corn perked up as the US Department of Agriculture said exporters sold 337,000 tonnes to unknown destinations for delivery in the 2021/22 marketing year.
Some traders predict the Ukraine conflict could shift up to 300 million bushels of additional demand to the United States, said Karl Setzer, a commodity risk analyst for AgriVisor.
US President Joe Biden’s administration is studying whether waiving biofuel blending mandates could help offset a surge in prices for key food ingredients like corn and soyoil following Russia’s invasion of Ukraine, two sources familiar with the matter said.
Commodity funds were net buyers of CBOT corn, soybean and soymeal futures contracts on Thursday and net sellers of soyoil, traders said.
Source: Brecorder
