CHICAGO: Chicago Board of Trade wheat futures reached a 12-week high on Friday as escalating tensions in Russia’s war with Ukraine increased uncertainty about Black Sea exports.
Traders focused on the Black Sea after Ukraine, a major wheat and corn supplier, accused Russia on Thursday of using strategic bombers to strike a civilian grain vessel in waters near NATO member Romania. Russia, the world’s biggest wheat exporter, declined to comment. Wheat markets have also been grappling with weather risks, with dryness hampering winter wheat sowing in Russia and Ukraine. A slide in the dollar further helped support CBOT futures, traders said, at it makes US crops look more attractive to importers.
“When we have reactions to world events, sometimes it is fairly fleeting,” said Matt Wiegand, commodity broker for FuturesOne. “But there’s enough structural stuff with dryness coming into fall, and questions about overall production, along with the cheaper dollar, to keep a better overall base of support under wheat for right now.” CBOT December wheat rose 16-1/4 cents to end at $5.94-3/4 a bushel. The most-active contract reached its highest level since mid-June on a continuation chart and climbed about 4.9% for the week.
The gains helped underpin the neighbouring corn market, which also benefited from recent US export sales and demand from domestic ethanol producers, Wiegand said.
“It’s certainly supportive until we really get harvest rolling to put a lot of bushels on top of it,” he said. CBOT corn rose 7-1/4 cents to $4.13-1/4 per bushel, while soybeans slipped 4-1/2 cents to $10.06-1/4 per bushel. The approaching US corn and soy harvests hung over futures prices, traders said. USDA on Thursday raised its US corn yield forecast, surprising analysts who had expected a downward revision after dry weather.
USDA is slated to issue updates on corn and soy harvesting in a weekly progress report on Monday. The monthly US soybean crush likely fell by more than 6% in August as processors idled plants before the harvest, analysts said ahead of a National Oilseed Processors Association (NOPA) report due on Monday.
Source: Brecorder
