Chicago | Reuters – Chicago Board of Trade wheat futures rose nearly four percent on Friday as a drone attack on Moscow reignited concerns about the risk of war disruption to Black Sea grain exports, analysts said.
Soybean futures rose for the third time, hitting a July high as the US forecast for hot, dry weather fueled concerns about crop stress. Corn futures also ended higher.
Since Moscow pulled out of the United Nations-backed export deal with Ukraine in July, grain traders have been concerned that escalating tensions between Russia and Ukraine could affect crop shipments from the Black Sea. Both countries are important grain exporters.
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On Friday, a Ukrainian drone crashed into a building in central Moscow after Russian air defenses shot it down, Russian officials said.
The most active wheat futures on the CBOT traded at 23-3/4 cents at $6.39 a bushel (all in US dollars). Earlier this week, the contract hit its lowest price since June 1st.
“We’ve overdone it a bit on the downside in terms of wheat,” said Matt Wiegand, commodities broker at FuturesOne.
CBOT soybeans closed 23-1/4 cents higher at $13.53-1/4 a bushel, hitting their highest price since July 31. Corn rose 7-1/4 cents to $4.93 a bushel.
Traders covered short positions in the soybean and corn markets ahead of the weekend, traders said, as weather forecasts called for little rain and hotter temperatures in the US Midwest for the remainder of August. Soybeans are considered more vulnerable to potential damage as August is the crucial month for crop development.
“There will be a significant amount of land that is susceptible to stress,” Wiegand said.
The change in weather helped markets recover after corn fell to December 2020 lows this week.
Next week, traders will evaluate the results of the annual Pro Farmer harvest tour, which surveys corn and soybean fields across the Midwest.
“Just when things seemed to be turning up for US corn and soybean farmers,” consulting firm CRM Agri wrote in a statement, “the weather outlook has turned more adverse.”
– Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
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