CANBERRA: Chicago wheat futures were unchanged on Tuesday after export-threatening Russian attacks on Ukrainian ports pushed them up more than 2% in the previous session, but prices remained near their lowest since 2020 amid plentiful supply.
Soybean and corn futures rose slightly.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was flat at $5.42-3/4 a bushel by 0208 GMT.
The contract fell to $5.23-1/2, its lowest since August 2020, on March 11, amid a flood of cheap grain from top exporter Russia, which has had two large production years and expects a third this year.
Russian air attacks at the weekend damaged agricultural enterprises and destroyed several industrial buildings in the port of Odesa in Ukraine, another significant grain exporter.
The Black Sea port city of Mykolaiv was also hit, with Ukrainian strikes against Russian oil refineries and Vladimir Putin’s re-election as Russia’s president raising fears that tensions between the two countries might escalate.
Russian export prices have increased slightly in recent days but remain low, said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney. CBOT wheat is likely to bump along around current levels in the coming months, he said, adding, “there’s too much wheat everywhere in the near term.”
The market is vulnerable to short term price spikes because speculators hold large short positions in Chicago wheat, corn and soybeans, and price increases can force short-covering.
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Commodity funds were net buyers of CBOT wheat and net sellers of soybeans and corn on Monday, traders said.
CBOT soybeans rose 0.1% to $11.89 a bushel on Tuesday and corn was up 0.3% at $4.37-1/4 a bushel.
Both contracts have risen in recent weeks but remain close to their lowest since 2020 amid plentiful supply from the Americas.
Analysts at Citi said in a note they were “neutral-bearish” on CBOT wheat, corn and soy over the next three months but “outright bearish versus spot and forwards in a 6-12 month horizon.”
Prices are likely to average $4.80 a bushel for wheat, $10.50 a bushel for soybeans and $3.75 a bushel for corn at the end of the year, they said.
Elsewhere, Ukraine’s 2024 corn sowing area is likely to decrease by 4.5% from last year to 3.863 million hectares, the agriculture ministry said, with farmers also set to decrease the sown area of spring wheat and sunflower and increase the sown area of spring barley and soybeans.
Brazil’s 2023/24 soybean harvest had reached 63% of the planted area as of last Thursday, up 8% from a week earlier, consultants AgRural said on Monday, adding that planting of Brazil’s second corn crop was 97% complete.
Drought in the western Canadian province of Alberta is stretching into its fourth year and farmers are planning for water restrictions that threaten production of wheat and beef.
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