U.S. grains: Wheat rallies as lifting of Ukraine missile restrictions sparks fears of war escalation

U.S. wheat futures climbed on Monday after the White House lifted restrictions that had blocked Ukraine from using U.S. missiles to strike deep within Russia, sparking concerns of an escalating war in the Black Sea breadbasket region.

Soybean futures rose on technical buying and export sales while corn followed the wheat rally, analysts said.

Chicago Board of Trade most-active wheat Wv1 rose 10-3/4 cents to settle at $5.47-1/4 per bushel.

Corn Cv1 closed up 5-1/4 cents at $4.29-1/4 a bushel, while soybeans Sv1 finished up 11-1/4 cents at $10.09-3/4 per bushel.

Traders on Monday feared that the Biden administration’s decision to allow Ukraine to use long-range missiles to strike Russia would make Black Sea wheat more difficult to grow and transport, according to analysts.

Russian President Vladimir Putin said in September that such a move would alter the nature and scope of the war, while Russian lawmakers on Sunday warned that it could trigger World War Three.

Rains in the wheat-growing U.S. Southern Plains kept a ceiling on the rally, however, said Randy Place, an analyst at the Hightower Report.

U.S. winter wheat crop conditions improved even more than trade expectations over the past week following that much-needed rain, the U.S. Department of Agriculture reported on Monday after trading ended.

In soy, a round of technical buying pushed futures up near the end of the session, while U.S. export sales of beans to Mexico, oil to India and meal to the Philippines, which were reported by the USDA earlier on Monday, also offered support.

Beneficial South American rains and a multi-day rally in the U.S. dollar last week to one-year highs anchored the market, Place said.

Corn followed gains in wheat on Monday, he added.

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Tags: U.S., futures, corn, soybeans, wheat