PARIS/SINGAPORE: Chicago wheat futures rose on Tuesday, supported by a Russian airstrike on the port of Odesa a day after Moscow suspended its participation in the grain export deal allowing Ukraine to ship grains via the Black Sea.
Soybeans rose, although gains were limited by a better-than-expected condition of the US crop, while corn edged higher.
Russia launched missile and drone strikes on southern and eastern Ukraine overnight that damaged infrastructure in the Black Sea port of Odesa, Ukrainian officials said on Tuesday.
“US markets had closed lower on a belief that the Kremlin would come back to the negotiation table, but the overnight strike is changing the game,” a French trader said.
The deal allowing the safe Black Sea export of Ukraine’s grain for the past year expired after Russia quit and warned it could not guarantee the safety of ships, in a move the United Nations said would “strike a blow to people in need everywhere”.
Ukraine has been building alternative avenues for exports since the start of the war. “However, they are not yet sufficient enough to entirely compensate for the loss of the Black Sea grain initiative,” Rabobank senior grains analyst Dennis Voznesenski said.
There are still expectations the deal may be renewed, and the markets were well aware of the risks of it expiring, which explains the fall in late trade on Monday, analysts and traders said.
Moscow said it would consider rejoining the pact if it saw “concrete results” of its demands, but that its guarantees for the safety of navigation would meanwhile be revoked.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1.3% at $6.62-1/4 a bushel, as of 1130 GMT, and corn gained 1.9% at $5.15-1/2 a bushel. Soybeans added 0.8% to $13.89 a bushel.
Weekly condition ratings for the US soybean and spring wheat crops improved more than expected in the past week following rains in parts of the Midwest and Plains, US government data showed on Monday, while corn ratings rose in line with trade expectations.
In other news, US soybean processors crushed fewer beans than expected in June as the monthly crush slumped to a nine-month low, the National Oilseed Processors Association (NOPA) said.
Brazilian farmers had harvested 36% of the area planted for their second corn crop in the center-south region by the end of last Thursday, consultancy AgRural said on Monday, up 9 percentage points from the previous week.
Commodity funds were net sellers of CBOT corn, wheat and soyoil futures contracts on Monday, and net buyers of soybean and soymeal futures, traders said.
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