By Julie Ingwersen
CHICAGO, March 17 (Reuters) – U.S. wheat futures rose on Thursday, with benchmark Chicago Board of Trade wheat Wv1 shaking off early weakness, as traders continue to wrestle with supply disruptions from Russia’s invasion of Ukraine.
Markets are closely watching the talks to end the war in Ukraine, which Russia calls “a special military operation”, but the Kremlin said there was no deal yet.
Wheat prices have been extremely volatile during the three weeks since the Feb. 24 invasion, as the market is heavily reliant on exports from both countries through the Black Sea.
France’s Strategie Grains said the war could remove from the world market in 2021/22 about 11 million tonnes of Black Sea wheat exports and some 12 million tonnes of corn exports.
As of 1:04 p.m. CDT (1804 GMT), CBOT May wheat WK2 was up 33-3/4 cents at $11.03 per bushel. May corn CK2 gained 26 cents at $7.56 a bushel and May soybeans SK2 were up 17 cents at $16.66-1/4 a bushel.
CBOT wheat bounced back after a 7% drop on Wednesday. The most-active contract Wv1 has retreated from record highs set last week 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 longer-term supply outlook is going to be. As long as you have that, it is hard for the markets to fully capitulate,” said Terry Linn, analyst with Linn & Associates in Chicago.
Also, updated monthly outlooks from the U.S. Climate Prediction Center forecast that drought would persist across much of the Plains through June, threatening winter wheat production prospects.
Corn futures rose on brisk export demand. The U.S. Department of Agriculture reported U.S. corn export sales in the week to March 10 at just over 2 million tonnes, topping trade expectations.
The USDA also confirmed sales of another 136,000 tonnes of corn to unknown destinations, the latest in a string of recent deals.
CBOT soybeans firmed, although the most-active May contract SK2 stayed inside of Wednesday’s trading range. Soybeans drew support from soyoil BOv1 and a rally in U.S. crude oil CLc1 futures back above $100 a barrel. Soyoil sometimes follows crude due to its role as a feed stock for biodiesel fuel.
However, a slowdown in export demand for U.S. soybeans hung over the soy complex, capping rallies.
“It looks to me like the fill-in business to China has probably run its course,” Linn said, noting a string of U.S. soy sales to China and unknown destinations in recent weeks.
(Additional reporting by Gus Trompiz in Paris and Rajendra Jadhav in Mumbai; Editing by Subhranshu Sahu, Tomasz Janowski and Amy Caren Daniel)
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