US wheat and corn futures retreated on Wednesday, but losses were capped by lingering concerns over Black Sea shipments, while soybeans slipped on pressure from Argentina exports.
Investors were cautious ahead of a widely expected interest rate hike from the US Federal Reserve in its fight against inflation.
The most-traded wheat contract on the Chicago Board of Trade (CBOT) was down 0.8 percent at $8.86-1/4 a bushel.
“Markets remain defensive ahead of tonight’s FOMC (Federal Open Market Committee),” analysts at Westpac said in a note.
The US dollar index edged higher towards this month’s 20-year high, while shares sank and oil prices extended losses as investors braced for a Fed rate hike of 75 basis points.
A more aggressive rate hike and hawkish signals could intensify recession fears and worries about demand for commodities, analysts said.
CBOT wheat climbed 8 percent on Tuesday, hitting a 10-week high, underpinned by renewed fears about Black Sea supplies.
Moscow-installed leaders in occupied areas of four Ukrainian regions plan to hold referendums on joining Russia in coming days, a challenge to the West that could sharply escalate the war and disrupt Black Sea shipments again.
A Black Sea corridor established under a U.N.-backed deal has allowed maritime grain exports from war-torn Ukraine. The agreement is due to expire in November.
CBOT soybeans slipped 0.1 percent to $14.77-1/2 a bushel, while CBOT cornshed 0.3 percent to $6.90 a bushel.
Farmers in Argentina, the world’s leading exporter of oil and meal derived from soybeans, continued to offload soy stockpiles last week following a series of carrot-and-stick measures aimed at spurring exports.
“Argentina’s short-term policy stimulus to promote concentrated soybean exports has created strong pressure on US soybean new crop exports,” analysts at Zhongzhou Futures in China said in a note.
