As supply fears from the Black Sea region emerged following Moscow’s statement that it was prepared to oppose renewing its export corridor pact unless its demands were met, Chicago wheat increased for a second day on Friday, aiming for a positive weekly finish.
Corn and soybean prices decreased, although both markets were still expected to post weekly gains due to predictions of reduced US harvests.
According to Terry Reilly, senior commodity analyst at Futures International in Chicago, “Russia threatened not to renew the Black Sea safe passage deal set to expire November.”
“The Russian envoy to the UN in Geneva cautioned that Moscow has expressed reservations to the UN regarding the Black Sea safe passage pact and might not renew the accord next month if demands are not addressed.”
As of 0237 GMT, the wheat contract with the highest trading volume on the Chicago Board of Trade (CBOT) was up 0.3% at $8.95 a bushel. After ending last week lower, the market has up 1.7% so far this week.
Corn and soybeans have both increased by more than 2% this week. Wheat prices increased when it was reported that Russia had sent the UN a list of issues with its agreement for a Black Sea export route.
On Sunday, UN representatives are scheduled to meet in Moscow to discuss the agreement’s renewal.
The UN-mediated agreement had made grain exports from the country, a significant exporter, safer.
Domestic consumers: Wheat prices have increased by roughly 29% in the last six months.
Following Vladimir Putin’s command to invade its neighbour in late February, exports had been halted. Prices for corn and soybeans were bolstered by US forecasts for decreased output.
The US Department of Agriculture (USDA) warned in its monthly supply-and-demand report on Wednesday that US corn and soybean yields would be smaller than anticipated, heightening concerns about low global stockpiles.
However, the agency also reduced its forecast for demand, particularly for exports, which would probably face fierce competition from shipments of South American crop.
The government also lowered its forecast for the domestic wheat stockpile to its weakest level in fifteen years.
Argentina’s two biggest grain exchanges in South America reduced their predictions for the next wheat harvest on Thursday as drought and low temperatures impacted the crop. Little relief was anticipated for significant farming regions, and limited rain was predicted in the following weeks.
According to dealers, commodity funds were net purchases of CBOT wheat, corn, soybean, and soyoil futures on Thursday while being net sellers of soymeal futures.
