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PARIS/SINGAPORE: Chicago wheat extended its surge to set another 14-year high on Thursday, taking weekly gains to more than a quarter, as Russia’s invasion of Ukraine continued to fan fears of massive disruption to exports from the Black Sea region.

Corn and soybeans edged higher as the market weighed the potential loss of large corn and sunflower oil supplies from Ukraine and Russia against improving weather for South American crops.

Russia and Ukraine account for about 29% of global wheat exports, 19% of corn exports and 80% of exports of sunflower oil, which competes with soyoil. The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 4.2% at $10.84-1/2 a bushel by the end of the overnight session. It earlier breached the $11 psychological threshold to reach its highest since March 2008.

The wheat market has rallied 26% so far this week.

The week-old war has closed Ukrainian ports and prompted unprecedented Western financial sanctions against Russia, leaving crop buyers rushing to seek alternative supply sources.

The hunt for short-term supplies has supported the surge in nearby futures. Deferred positions slid on Wednesday in volatile trading and traded narrowly mixed on Thursday.

“There is a lot of activity in nearby positions as people wonder how we’re going to cover supplies for this season, with one export country that’s prevented from shipping and another that people don’t want to touch,” said a European trader, referring to Ukraine and Russia, respectively.

However, analysts said there was a growing risk of longer-term disruption to Black Sea supplies as the war damages Ukraine’s infrastructure and farmland, while Western sanctions hit trade with Russia.

“The world is full of possibility at present. And one of those possibilities is that, somehow, Ukraine and Russia harvests cannot be exported,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.

Ukraine and Russia are due to hold a second round of peace talks on Thursday as Moscow’s invasion of its neighbour entered a second week.

CBOT corn was up 0.7% at $7.30 a bushel and soybeans 1.1% higher at $16.81-1/4 a bushel.

Soybeans have been supported by a run of purchases from China.

Traders are also watching to see how key importer China adapts to the potential loss of Black Sea cereal supplies.

China’s wheat prices on Thursday topped 3,000 yuan ($474.84) per tonne for the first time this week as the war in Ukraine added to worries over a domestic supply crunch.

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