Corn, wheat recover from lows with Black Sea tensions in focus
Chicago corn edged higher on Wednesday after hitting its weakest since December 2020 while wheat rebounded from a two-month low, supported by an easing dollar and another Russian attack on a Ukrainian grain port.
Soybeans were also firm as a rally in palm oil helped offset pressure from improving U.S. crop conditions.
Grain markets fell sharply in the previous session as investor worries about China’s economy dented financial markets while increased ratings for U.S. corn and soybean crops boosted harvest expectations.
Russian drone strikes damaged grain silos and warehouses at the Ukrainian river port of Reni on the Danube, a vital wartime route for Ukrainian food exports, senior officials said on Wednesday.
The incident turned attention back to war risks to the Black Sea export trade, though as in previous attacks signs of limited port disruption tempered market concerns.
“There is renewed tension and questions about Ukrainian port infrastructure. But so far, each time we’re seeing an incident the market is not really reacting,” Gautier Le Molgat, head of consultancy Agritel, said.
“The U.S. market is being influenced by crop conditions for corn, which look good, and that is easing supply worries.”
The U.S. Department of Agriculture’s (USDA) weekly crop progress report, issued after trading ended on Monday, rated 59% of the corn crop as good to excellent. That was up from 57% a week ago and above analysts’ estimates for 58%.
“The U.S. continues to drive corn prices lower given higher production than previously forecasted, which is expected to lead to a surplus in supply,” said Darren Stetzel, vice president for agriculture in Asia at brokerage StoneX.
The most-active corn contract on the Chicago Board Of Trade (CBOT) was up 0.6% at $4.78-1/2 a bushel by 1059 GMT, after hitting its lowest since December 2020 at $4.73-1/2 earlier in the session.
CBOT wheat gained 0.9% to $6.29-1/4 a bushel after hitting its lowest since June 1 in the previous session.
Soybeans rose 0.6% to $13.13-1/4 a bushel.
Grain markets got some respite on Wednesday from outside markets, with the dollar edging lower and crude oil steadying.
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