Chicago wheat rises as traders assess Ukraine peace talk developments

BEIJING: Chicago wheat futures climbed on Tuesday as traders assessed developments surrounding the Ukraine peace talks.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 rose 0.1% to $5.13-1/2 a bushel by 0418 GMT.

Positive signals emerged over the weekend from talks between US President Donald Trump and Ukrainian President Volodymyr Zelenskiy aimed at ending the war in Ukraine.

However, those hopes were dented on Monday after Russia accused Ukraine of trying to attack President Vladimir Putin’s residence, pledging retaliation in response.

Ukraine dismissed the claim, calling it a lie intended to derail peace talks.

An end to the war in Ukraine would likely weigh on wheat prices, as the removal of war-related shipping risks would reduce export costs and increase access to more Ukrainian ports for wheat shipments.

Ukraine is one of the worlds’ biggest exporters of wheat and corn.

“While further disruption in the Black Sea region would add some upwards pressure to prices, this risk is largely priced in,” said Claire Adams, agricultural analyst at Bendigo Bank Agribusiness.

“If peace talks were to progress successfully, the market would likely have a bearish tone, however, due to the understanding that recovery of the infrastructure damage in the area will take some time, the impact may not be immediate,” she added.

Trading remained light after the Christmas holiday and as the year-end approached, with many traders booking profits and exiting the market.

CBOT soybeans climbed 0.14% to $10.65 a bushel. Corn rose 0.06% at $4.42-1/2 a bushel.

Traders are watching China’s military drills around Taiwan, which test Beijing’s ability to cut off external support and Taiwan’s defence resolve.

These tensions are seen as a risk to the US-China trade truce.

China is the world’s largest soybean buyer.

Soybeans and wheat continued to face pressure from abundant global supplies, while strong US corn demand helped stabilise corn futures.

“A firming crude oil price provided some underlying support for soy,” said Adams.