SINGAPORE: Chicago wheat and corn futures slid on Monday, with prices under pressure after a deal to export grains from war-torn Ukraine was extended over the weekend, easing some of the concerns over global supply. Soybeans ticked lower on ample supplies from newly harvested record crop in Brazil.
“There wasn’t huge amount of doubt about the Black Sea deal but as far as today’s market action goes, I think the extension of the deal is putting pressure on prices,” said Phin Ziebell, an agribusiness economist at National Australia Bank.
The most-active wheat contract on the Chicago Board of Trade was down 1.3% at $7.01 a bushel, as of 0342 GMT, and corn lost 1% to $6.28 a bushel. Soybeans eased 0.3% to $14.71-3/4 a bushel.
The deal allowing the safe Black Sea export of Ukrainian grain was renewed on Saturday for at least 60 days - half the intended period - after Russia warned any further extension beyond mid-May would depend on the removal of some Western sanctions.
The pact was brokered with Russia and Ukraine by the United Nations and Turkey in July and renewed for a further 120 days in November.
The aim was to combat a global food crisis that was fuelled in part by Russia’s Feb. 24, 2022, invasion of Ukraine and Black Sea blockade.
Brazil’s National Energy Policy Council on Friday raised the country’s mandatory blend of biodiesel in diesel to 12% starting in April, Mines and Energy Minister, Alexandre Silveira said.
CBOT wheat futures close higher
The measure is expected to favour mainly the soybean processing industry, since about 65% of the total biodiesel was produced with soyoil in 2022.
Brazil’s record soybean crop this season will allow the nation to boost exports to China while also increasing domestic soybean processing, Andre Nassar, the chief of Brazil’s oilseed lobby Abiove, told Reuters.
Large speculators switched to a net short position in Chicago Board of Trade corn futures in the week to March 7, regulatory data released on Thursday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and raised their net long position in soybeans.
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