SINGAPORE: Chicago wheat gained more ground on Wednesday, as attacks on Black Sea grain cargoes and lower US production estimates from a crop tour underscored 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.
“Disruptions to Black Sea grain exports are not isolated to Russia,” ING said in a note. “Ukrainian exports are also being heavily disrupted amid ongoing Russian attacks on port infrastructure.” The most-active wheat contract on the Chicago Board of Trade (CBOT) climbed 0.7percent to USD6.82-1/2 a bushel by 0256 GMT, extending gains to a second straight session. Soybeans eked out 0.04percent of gains to USD12.23-1/4 a bushel and corn rose 0.2percent to USD4.76-1/4 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.
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 8percent below the estimate for the same area last year and just above the five-year average of 45.8 bpa. The Sovecon agriculture consultancy on Tuesday cut its forecast for Russia’s wheat crop this year to 88.3 million metric tons, down from 88.9 million tons, citing weaker prospects in the south of the country and a smaller spring wheat area.
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.
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