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Wheat recovers from initial weakness and corn rises due to export demand in the US

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By Julie Gingersen

CHICAGO, US, March 17 (Reuters) – U.S. wheat futures rose on Thursday and the benchmark contract on the Chicago Stock Exchange shook off its early weakness, as traders continue to struggle with supply disruptions from Russia’s invasion of Ukraine.

* Markets are closely watching talks to end the war in Ukraine, which Russia calls a “special military operation,” but the Kremlin said no deal was yet in place.

* Wheat prices have been extremely volatile in the three weeks since the February 24 invasion, as the market relies heavily on exports from both countries via the Black Sea.

* French company Strategie Grains said the war could wipe out some 11 million tonnes of Black Sea wheat exports and some 12 million tonnes of corn exports from the world market in 2021/22.

* By 1804 GMT, May wheat was up 33.75 cents at $11.03 per bushel. Corn for the same month was up 26 cents at $7.56 a bushel and soybeans were up 17 cents at $16.6625 a bushel.

* Wheat rebounded after falling 7% on Wednesday. The most active contract has retreated from last week’s record highs above $13 a bushel, but remains elevated as the conflict in Ukraine continues.

* “At the end of the day, we have this uncertainty about what the long-term supply outlook is going to be. As long as there’s that, it’s hard for markets to capitulate entirely,” said Terry Linn, an analyst at Linn & Associates in Chicago.

* In addition, the updated monthly outlook from the US Climate Prediction Center forecasts that drought will persist across much of the Plains through June, threatening winter wheat production prospects.

* Corn futures rose on strong export demand. The US Department of Agriculture reported that corn export sales for the week to March 10 were just over 2 million tons, exceeding trade expectations.

* The USDA also guarantees the sale of another 136,000 tons of corn to unknown destinations, the latest in a series of deals.

* CBOT Soybeans strengthened, although the more active May contract remained within Wednesday’s trading range.

* Soybeans were supported by soybean oil and a rally in US crude futures, which returned above $100 a barrel. Soybean oil sometimes follows crude because of its role as a feedstock for biodiesel.

* However, slowing export demand for US soybeans looms over the complex, capping gains.

(Reports added to Gus Trompiz in Paris and Rajendra Jadhav in Mumbái; Edited in Spanish by Javier López de Lérida)

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