Chicago | Reuters — Chicago Board of Trade wheat futures set a two-month low on Monday on increasing estimates for Russia’s production and exports, analysts said, shrugging off a Russian warship firing warning shots at a cargo ship on its way to Ukraine.
Corn futures finished near unchanged after matching a recent low from 2021, while soybean futures advanced.
Russia’s IKAR raised its forecasts for Russia’s wheat crop amid record weekly shipments.
Markets’ muted reaction to Russia’s weekend warning shots indicate traders are waiting to see actual disruptions to Black Sea grain exports before reacting, analysts said.
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Officials have worried escalating tensions between Russia and Ukraine could threaten crop shipments since Moscow quit the U.N.-brokered Black Sea grain export deal last month.
“The market feels the Russian ship incident was not a big deal, and facts rather than fear are in focus,” said Matt Ammermann, StoneX commodity risk manager.
The Russian military boarded the Palau-flagged cargo vessel before it continued on its way, Russia’s defense ministry said.
“Russia did take a look at a ship but didn’t attack it,” said Ted Seifried, chief market strategist for Zaner Ag Hedge. “You have a relatively benign weekend that we just came off of for Russia-Ukraine tensions.”
Most-active wheat futures fell 10-3/4 cents to $6.16 a bushel and touched their lowest price since June 2 (all figures US$). Technical selling and lacklustre U.S. export demand added pressure on prices, analysts said.
Corn ended up 1/2 cent at $4.87-3/4 a bushel. The market earlier matched a low from January 2021 that it reached in July.
Soybeans, meanwhile, jumped 18-1/2 cents to $13.26 a bushel, after the U.S. Department of Agriculture on Friday lowered its forecasts for U.S. harvests.
USDA on Monday said exporters sold 416,000 metric tonnes of U.S. soybeans to unknown destinations.
“We have the potential for a fairly tight balance sheet in beans,” Seifried said. “There’s not a lot of room to grow new demand, and we continue to see these daily flash sales.”
— Reporting by Tom Polansek in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.
