Wheat futures on the Chicago Board of Trade hit a one-month high early on Wednesday as renewed concern about political tension in the Black Sea grain region triggered short-covering and fresh buying, traders said. Russia has massed around 20,000 combat-ready troops on Ukraine's border and could use the pretext of a humanitarian mission to invade, Nato said in its starkest warning yet that Moscow could soon mount a ground assault against its neighbour.
Additional support from worries that rain damage to mature crops in France, Germany and Ukraine may downgrade quality and limit global stocks of food-grade wheat, potentially boosting export demand for US supplies. Funds hold a sizable net short position in CBOT wheat, leaving the market vulnerable to periods of short-covering.
CBOT September wheat neared its 50-day moving average of $5.74 a bushel, reaching $5.72 before paring gains to settle at $5.68. Euronext wheat futures rose sharply in early trade on talk that the market's two delivery silos would revise quality requirements to preserve illing quality, traders said. A spokeswoman for Euronext declined to comment. Iran bought 50,000 tonnes of Black Sea wheat, trade sources said, as the Islamic Republic tries to bolster stocks from global markets due to a lower-than-expected domestic harvest. Analysts expect USDA to raise its forecasts of 2014/15 US and world wheat ending stocks in a monthly report next week.
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