U.S. grains: Wheat rallies on rising concerns about Black Sea exporters

(Lisa Guenther photo)

Chicago | Reuters — U.S. wheat futures rose 1.7 per cent to a three-week high on Thursday, supported by concerns that escalating tensions between Ukraine and Russia would curtail shipments from those two key grain exporters, traders said.

“The grains were reasonably stable overnight, until it was reported this morning that Russian troops were launching offensives in southeastern Ukraine,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients. “That has perked up the wheat trade in a hurry, and generously donated a few cents to corn and bean causes.”

The jump in wheat prices was the biggest in nearly two weeks but strength in corn and soybeans was muted by expectations of a big harvest and beneficial weather forecasts that will shepherd the crops through their late stages of development.

Deferred soybeans ended higher despite the weather outlook but the front-month September soybean contract closed lower on profit taking in volatile trade ahead of its first notice day on Friday.

Chicago Board of Trade soft red winter wheat for September delivery closed 9-1/4 cents higher at $5.56-1/2 a bushel, the highest for the front-month contract since hitting $5.68 on Aug. 7 (all figures US$). CBOT December wheat, the most actively traded wheat contract, was 9-1/2 cents higher at $5.71-3/4 a bushel.

December wheat received additional support from technical buyers after passing through resistance at its 50-day moving average for the first time since May 14.

Ukraine’s president said on Thursday that Russian forces had entered his country and Russian-backed separatists had swept into the southeastern city of Novoazovsk on the Sea of Azov coast and threatened other areas.

“The crisis is getting closer to Mariupol,” a key trading port, a trader said, although there was no indication yet the situation would hurt Ukraine’s wheat exports.

Ukraine kept grain exports at a high level in August, shipping 2.17 million tonnes of grains from Aug. 1 to 26, of which there were 1.19 million tonnes of wheat, agriculture consultancy UkrAgroConsult said on Thursday.

CBOT September soybeans were 12 cents lower at $10.73-3/4 a bushel in volatile trading ahead of the first notice day for the contract. New-crop November, the first contract to track what’s expected to be a record harvest in the U.S., was up five cents at $10.28-3/4 a bushel.

CBOT September corn was 5-3/4 cents higher at $3.61-3/4 a bushel while new-crop December gained 4-1/4 cents to $3.69-1/4.

“Late-season rains remain hugely beneficial for the bulk of those crops, with lots more moving through today,” INTL FCStone’s Zeller added.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Valerie Parent and Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.

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