CHICAGO: US wheat futures tumbled 5.6% on Tuesday, snapping a six-session winning streak, as the market wrestled with supply upheaval caused by Russia’s invasion of fellow grain exporter Ukraine.
Merchants and importers are seeking alternatives to Ukrainian and Russian supplies, which usually account for about 30% of the world’s wheat exports.
“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.
At 10:27 a.m. CST (1627 GMT), Chicago Board of Trade May soft red winter wheat futures were down 73 cents at $12.21 a bushel.
Corn futures were slightly lower, with the market taking a pause after the supply disruptions from key exporters Russia and Ukraine pushed prices up 10% since Russia’s invasion.
But soybean futures were strong, rising 2% on expectations for a bump in US 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 US 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 US Agriculture Department will release its monthly World Agricultural Supply and Demand Estimates report, which will include its assessment of Brazilian production, on Wednesday.
CBOT May soybeans were up 33 cents at $16.92-1/2 a bushel.
USDA said on Tuesday morning that private exporters reported the sale of 126,000 tonnes of soybeans to unknown destinations and 132,000 tonnes of soybeans to China. CBOT May corn was off 3/4 cent at $7.50 a bushel.
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