CHICAGO: Chicago Board of Trade grain futures fell on Friday under pressure from diplomatic efforts to ease war disruption to Black Sea grain exports, analysts said.
A lack of details about new agricultural deals during a US-China summit also hung over prices. The most actively traded wheat contract fell below the USD7 per bushel threshold for the first time in a month on expectations for a recovery in Black Sea shipments that have been crippled by Russia’s war on Ukraine. Both countries are major global grain suppliers.
There has been “a notable increase in mediation efforts for commodity movement through the Black Sea,” said Mike Castle, senior commodities economist for consultancy StoneX.
“What’s worth noting about this renewed push is that the focus is on Black Sea shipping itself, not making this part of a broader peace agreement,” he said. CBOT wheat was down 7-1/2 cents at USD6.99-1/2 per bushel by 11:50 a.m. CDT (1650 GMT) after setting the lowest price since August 19 at USD6.83-1/2.
Attempts by Turkey to broker a Black Sea truce have fuelled expectations of a possible improvement in shipping flows. Despite market scepticism over prospects for Black Sea shipments given continued attacks, large long positions held by investors and a cautious approach by wheat importers have further removed support for prices following three-year highs in early September, according to traders.
“Even the prospect of any improvement to said flow coming to fruition may trigger nerves for managed money traders holding big speculative length,” Castle said. A two-month high for the dollar index this week has also curbed export prospects for US grains, before it eased back on Friday.
CBOT corn slipped 1/2 cent to USD5.27 a bushel after touching a one-month low, while CBOT soybeans rose 1/2 cent to USD13.18 a bushel in a turnaround from earlier losses.
A highly anticipated US-China summit has so far not yielded further Chinese commitments to buy US agricultural goods. But the US is expected to release details on the outcome of trade negotiations with China on Monday, US Trade Representative Jamieson Greer said.
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