Wheat extends gains on risks to Ukraine exports, US crops

Chicago wheat rose further on Tuesday to its highest in nearly three weeks as poor conditions for U.S. wheat crops and import bans targeting Ukrainian grain in eastern Europe created concern about global availability.

Corn futures stayed firm, supported by the risks to Ukrainian supply as the market assessed mixed weather for U.S. planting.

Soybeans also extended gains. The oilseed was supported by strong crushing demand in the U.S. in March and a rally in edible oil markets as participants feared disruption to Ukrainian exports.

In Romania, the ruling Social Democrat Party (PSD) said it will ask the coalition government to approve a temporary ban on Ukrainian grain imports, mirroring moves by other eastern European Union countries concerned about an influx of cheaper grain.

A halt to vessel inspections on Monday under a Black Sea grain agreement heightened concerns about Ukrainian shipments after Russia’s warnings it could pull out of the wartime deal next month, though inspections resumed on Tuesday.

“It seems that Ukraine’s crop exports are being threatened like never before,” brokerage Copenhagen Merchants said in a note.

However, market reaction has been tempered by expectations an agreement may be reached with EU countries to maintain transit of Ukrainian grain for onward export, as well as continuing large exports of Russian wheat.

The U.S. Department of Agriculture (USDA) rated 27% of U.S. winter wheat in good-to-excellent condition, unchanged from a week ago and the lowest for this time of year in records dating to the late 1980s.

For corn, the USDA said planting was 8% complete by Sunday, behind the average analyst estimate of 10%, but ahead of the five-year average of 5%.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1.0% at $7.14 a bushel by 1054 GMT, after earlier reaching a highest since March 29.

CBOT soybeans rose 0.9% to $14.98-3/4 a bushel and corn added 0.4% to $6.45-1/4 a bushel.

Tags: U.S., futures, edible oil, markets, Ukraine, supply, corn, export, Romania, planting, soybeans, wheat