PARIS/BEIJING: Chicago wheat futures eased on Wednesday, moving back from a one-week high as fears about escalation in the war between Ukraine and Russia receded, while a rebound in the dollar underscored export competition.
March wheat on the Chicago Board of Trade (CBOT) was 0.6% down at $5.64-1/4 a bushel at 1214 GMT, breaking a three-day rally that took the contract to a one-week peak on Tuesday.
Ukraine used US long-range missiles to strike Russian territory on Tuesday, taking advantage of newly granted permission from the outgoing Biden administration on the Ukraine war’s 1,000th day.
The news revived concern about crucial Black Sea supply, but like in previous war developments market reaction was tempered by the absence of immediate disruption to grain trade.
“Our expectation is that this rise of the past couple of sessions will be short-lived. There has been little fundamental information to maintain the rally unless (Russian President Vladimir) Putin attacks the grain infrastructure in Ukraine,” said Andrew Whitelaw, an analyst at agricultural consultants Episode 3 in Canberra.
The dollar rose on Wednesday after a two-day drop to move back towards a one-year peak, making US grain more expensive overseas.
Russian and Ukrainian wheat exports remained brisk and the arrival of southern hemisphere crops was expected to maintain stiff competition in wheat export markets.
Improving supply prospects for next year were also helping cap wheat prices.
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