Chicago | Reuters — U.S. wheat futures fell Tuesday, snapping a six-session winning streak, as the market wrestled with supply upheaval caused by Russia’s invasion of fellow grain exporter Ukraine.
Wheat prices hit the downside of their daily trading limits during the session but closed well above those lows after Interfax news agency said Russian President Vladimir Putin signed a decree restricting imports and exports of certain goods.
Merchants and importers are seeking alternatives to Ukrainian and Russian supplies, which usually account for about 30 per cent of the world’s wheat exports.
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“We are seeing a drop in Chicago futures today but that doesn’t mean prices in the physical market will come down,” said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney. “Wheat supplies are tight and demand remains absolutely strong.”
While Ukrainian ports remain shut, deepening Western sanctions against Moscow are discouraging importers and shipowners from deals for Russian grain.
Chicago Board of Trade May soft red winter wheat futures settled down 7-1/2 cents at $12.86-1/2 a bushel (all figures US$).
Corn futures ended firm after trading both sides of unchanged, with the benchmark CBOT May contract rising 2-1/4 cents at $7.53.
Soybean futures were strong, rising 1.8 per cent on expectations for a bump in U.S. exports after a dry growing season in South America.
“Soybeans are trading higher this morning supported by strength in the crude oil market and the need for solid U.S. planted acreage given that the Brazilian crop is increasingly thought to be disappointing,” Tomm Pfitzenmaier, an analyst for Summit Commodity Brokerage in Iowa, said in a note to clients.
The U.S. Agriculture Department will release its monthly world agricultural supply and demand estimates (WASDE) report, which will include its assessment of Brazilian production, on Wednesday.
CBOT May soybeans settled up 30-1/4 cents at $16.89-3/4 a bushel.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
