Wheat rises on Black Sea supply squeeze; soy slips on China demand fears

U.S. and European wheat futures rose on Tuesday as export curbs by Russia fuelled concerns about global supply disruptions following Moscow’s invasion of Ukraine.

Latest crop ratings for U.S. wheat, confirming poor conditions in drought-affected states like Kansas, also supported wheat in the face of losses in other commodity markets.

Corn and soybeans fell as they reacted to investor worries that renewed coronavirus outbreaks in China could hit demand, as well as hopes that talks between Moscow and Kyiv could progress towards a ceasefire.

The most-active wheat contract on the Chicago Board of Trade (CBOT) (Wv1) was up 2.8 percent at US$11.27 a bushel by 1116 GMT.

Russia on Monday enacted a planned suspension of grain exports to ex-Soviet countries, along with a temporary halt to most sugar exports.

The government said it would keep on providing special licences to traders within its current grain export quota. But the news unnerved traders already grappling with an abrupt fall in Black Sea exports due to the closure of Ukrainian ports and Western sanctions against Moscow.

“This type of announcement has above all made the market nervous,” consultancy Agritel said.

Monday’s headlines led to a sharp rise on Euronext, reflecting recent demand for European Union wheat to replace Ukrainian and Russian supplies.

May wheat on Paris-based Euronext was up 1.5 percent at 384.25 euros (US$422.21) a tonne, after closing up more than 2 percent on Monday.

CBOT corn (Cv1) was down 1.2 percent at US$7.39-1/4 a bushel and soybeans (Sv1) fell 1.6 percent at US$16.43-3/4 a bushel.

Crude oil fell steeply as commodity markets feared resurgent COVID-19 cases in China could lead to tougher restrictions on populations and hurt demand for raw materials.

Soybeans were also pressured by a slide in palm oil, which competes with soyoil in the vegetable oil market.

The Western Producer

Tags: Ukraine, Russia, export, soybeans, U.S., wheat futures, сorn