Wheat near multi-month lows as traders eye Russia-Ukraine talks

CANBERRA: Chicago wheat prices edged higher on Tuesday but stayed near multi-month lows as traders awaited the outcome of peace talks between Russia and Ukraine that could boost global supply by reviving grainexports through the Black Sea.

Corn and soybean futures rose ahead of a monthly US Department of Agriculture supply and demand report due later on Tuesday but have also fallen in recent weeks due to ample supply.

The most-traded wheat contract on the Chicago Board of Trade (CBOT) was up 0.2% at $5.89 a bushel at 0528 GMT after falling to $5.85 on Friday, its lowest since June 30.

Prices have slumped around 25% from highs in early September.

Russian wheat export prices fell last week amid declining demand, analysts said, as market participants watch talks between Russia, Ukraine and the United States in Abu Dhabi on November 10-11.

Attacks on Black Sea shipping have curtailed Russian and Ukrainian grain exports in recent months, but the market has not tightened as much as some predicted.

Many funds have been building up short positions, sometimes on the back of headlines about peace talks, pushing down prices but making the market vulnerable to a rapid short-covering rally, said Nick Carracher, CEO of consultants Lachstock.

“We’re nearing baseline support level,” he said, adding that new supply from the Australian and Argentine harvests in the coming months would keep a lid on prices even if Black Sea exports remain restricted.

Meanwhile, Lithuania said it would require Russian and Belarusian grain shipped through the port of Klaipeda to be held until tests verifying its origin are completed, which could delay exports by months.

In other crops, CBOT corn rose 0.4% to $4.41 a bushel and soybeans gained 0.2% to $11.91 a bushel. Corn is down around 20% since early September and soybeans have fallen roughly 10%.

Analysts expect the USDA to raise its US soy harvest forecast to a record high but trim its US corn production view, though that crop is also expected to be among the largest ever.

The US soybean harvest was 92% complete and the corn harvest 81% finished as of Sunday, the USDA said.

Relatively benign crop weather in Brazil has also fed expectations of large soy and corn crops there.