Wheat treads water amid Black Sea export disruption

CANBERRA: Chicago wheat futures edged lower on Thursday as expectations of ample supply blunted the impact of fighting between Russia and Ukraine that is disrupting shipments from the Black Sea.

Corn and soybean futures were little changed after losing ground in the previous two sessions due to expectations that rainfall in the US Midwest will boost crop yields.

The most-traded wheat contract on the Chicago Board of Trade (CBOT) was down 0.2% at $6.41 a bushel at 0413 GMT.

Wheat has dipped from a two-year high above $7 a bushel reached two weeks ago, but prices are up more than 25% this year, albeit from a low base and far from 2022 highs of nearly $14.

“The key uncertainty is how the conflict between Russia and Ukraine evolves,” Rabobank analyst Vitor Pistoia wrote in a note to clients.

A surge in attacks on ships, ports and export terminals in the Black Sea is hampering shipments, and Ukraine’s agriculture minister said alternative export routes would not fully compensate for lost export capability until at least the end of August.

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But Pistoia said that while grain delivery was disrupted, Russia and Ukraine had between them harvested a million metric ton more wheat this year than their five-year average.

“This (disruption) should support nearby prices,” he said, “but does not yet point to a structurally bullish price scenario, as there is no major production shortfall.”

In other crops, corn and soybeans were flat at $4.60 a bushel and $11.74-1/2 a bushel respectively.

Pressuring corn prices was a projection by StoneX that the United States would produce 16.160 billion bushels of corn this year.

StoneX’s average yield forecast of 184.8 bushels per acre was higher than the latest forecast from the US Department of Agriculture.