Chicago | Reuters – Chicago Board of Trade wheat futures inched higher on Tuesday on positioning ahead of the holidays, though a massive global supply of wheat kept a lid on prices.
Soybeans and corn spent the day chopping up and down, but gained some support from an end-of-year rally, which is typical as traders exit positions ahead of the Christmas and New Year’s holidays.
The most-active wheat contract on the Chicago Board of Trade Wv1 settled 1-1/2 cents higher at $5.17 per bushel.
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Wheat had rallied on Monday on concerns that escalation in the war in Ukraine could disrupt Black Sea exports.
Russian forces hit port and energy infrastructure in Ukraine’s Odesa region, sparking a fire that burned 30 containers of flour and vegetable oil at the port of Pivdennyi, a senior Ukrainian official said on Monday.
However, dropping Russian wheat prices and an ample supply of Argentinian wheat helped counteract support from the ongoing Black Sea war.
“Even though there are problems, Russian wheat prices are dropping,” said Dan Basse, president of AgResource. “It’s a world awash in wheat.”
CBOT soybeans Sv1 settled 1-1/4 cents lower at $10.63-3/4 per bushel, while corn Cv1 settled up 1/2 cent at $4.47 per bushel.
Soybeans had slid last week as traders remained cautious about the pace of Chinese purchases of U.S. beans under a bilateral trade truce, while forecasters continued to project another record harvest in Brazil this season. Favorable weather in South America is also expected to benefit the region’s bumper soy crop.
An overall bearish picture for grains has weighed on prices and diminished the effects of a typical end-of-year rally, also known as the “Santa Claus” rally.
“Santa may have come early, but the world has too much grain and Santa’s pouch is full,” said Basse.
-Additional reporting by Daphne Zhang in Beijing, Naveen Thukral in Singapore and Gus Trompiz in Paris.
