Chicago | Reuters — U.S. wheat futures rose on Wednesday on concerns that any intensification of Russia’s war on Ukraine could clog the export pipeline from those two major exporters.
“I think the market is trying to price in an increasing likelihood that an escalation … turns into a European theatre war,” said Mike Zuzolo, president of Global Commodity Analytics. “And rightfully so. We haven’t written these chapters of the book yet.”
Soybean futures also were strong, closing near session highs on a round of short-covering and bargain buying after five straight losing sessions.
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Corn and soybean yields in the United States were left unchanged in the latest supply/demand estimates from the U.S. Department of Agriculture, released July 11, although a reduction in harvested area led to small downward revisions to production for the crops.
But corn futures were weak, giving up early gains, as rains in Argentina bolstered crop prospects there.
“With the weather improving in South America, it will be hard for these recovery rallies to go very far,” Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage, said in a note.
“It appears that the drought has been broken in the dry areas and now the trade will have to try to figure out how much damage was done and how much the crop can recover with the change in weather.”
Chicago Board of Trade March soft red winter wheat futures settled up 6-3/4 cents at $7.41-1/4 a bushel (all figures US$).
Soaring global prices lent strength to the U.S. market, which extended its recovery from the 16-month low hit on Monday.
India will provide three million tonnes of wheat to bulk consumers such as flour millers, as part of attempts to bring down prices, a government official said. Prices for India’s wheat jumped to a record high on Wednesday as farmers and traders have run out of stocks.
CBOT March soybean futures ended up 14 cents at $15.02-1/4 a bushel while corn for March delivery dropped 2-1/4 cents to $6.74-3/4 a bushel.
— Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Christopher Walljasper in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.
