Chicago wheat jumps on renewed attacks on Black Sea ports

PARIS/SINGAPORE: Chicago wheat rose to near two-year highs on Wednesday, as renewed attacks on Black Sea grain ports heightened concerns over regional exports, while lower U.S. production estimates from a crop tour added to worries over global supplies.

Soybeans and corn firmed, tracking higher crude prices amid escalating tensions in the Middle East, which have curtailed global oil supplies.

The most-active wheat contract on the Chicago Board of Trade (CBOT) climbed 2.6% to $6.95-3/4 a bushel by 1355 GMT, extending gains for a second straight session. Soybeans gained 0.5% to $12.29 a bushel and corn rose 1.4% to $4.81-3/4 a bushel.

Wheat prices have climbed in recent weeks after attacks on grain ships and port infrastructure in the Black Sea and the Sea of Azov by both Ukraine and Russia.

The Russian Defence Ministry said on Wednesday its forces attacked Ukrainian ports and military infrastructure in the Odesa region.

The ministry said two naval vessels had been hit as a result of the strikes, as well as port infrastructure facilities used for unloading and storing military cargo and fuel and lubricant storage tanks in the port of Odesa.

“There is no direct link with grains, but any sign of disturbance in Odesa is supportive,” a French trader said.

A Russian missile strike on a ship carrying corn near Ukraine’s southern port of Odesa killed 10 people, Ukrainian officials said on Monday, in the deadliest attack in a weeks-long flare-up of violence in the Black Sea.

The greater Odesa hub handles over 90% of Russia’s grain and vegetable oil shipments.

Expectations of lower output are also supporting wheat prices after crop scouts on the first day of an annual three-day tour of North Dakota’s hard red spring wheat crop projected an average yield in the southern portion of the state at 46.0 bushels per acre (bpa) on Tuesday evening. That figure was 8% below the estimate for the same area last year and just above the five-year average of 45.8 bpa.

Rising crude oil prices are underpinning soybean and corn markets as higher petroleum prices boost demand for agricultural feedstocks used to produce biofuels.

Two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday after threats from Yemen’s Iran-aligned Houthis, as a widening Middle East conflict disrupted shipping through two of the world’s most critical energy chokepoints.