SINGAPORE- Chicago wheat futures rose more than 2 percent on Monday, recouping some of the previous session’s sharp losses, as Russia’s missile attacks raised concerns over Ukrainian supplies, despite a deal between the two nations.
Corn rose 1.2 percent, while soybeans added 0.2 percent.
“The Black Sea corridor itself is news but it does not guarantee that shortfall will reach the market,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.
“Russia launched missile attacks on the port of Odesa over the weekend. The attacks make a mockery of the corridor agreement — but then by now that kind of action is hardly a surprise.”
The most-active wheat contract on the Chicago Board of Trade (CBOT) climbed 2.5 percent to $7.78 a bushel, as of 0215 GMT.
Corn gained 1.2 percent at $5.70-3/4 a bushel and soybeans rose 0.2 percent to $13.18-1/4 a bushel.
Ukraine pressed ahead on Sunday with efforts to restart grain exports from its Black Sea ports under a deal aimed at easing global food shortages but warned deliveries would suffer if a Russian missile strike on Odesa was a sign of more to come.
President VolodymyrZelenskiy denounced Saturday’s attack as “barbarism” that showed Moscow could not be trusted to implement the deal struck just one day earlier with Turkish and United Nations mediation.
However, Russia’s foreign minister, Sergei Lavrov, offered reassurances over Russian grain supplies to Egypt during a visit to Cairo on Sunday, amid uncertainty over a deal to resume Ukrainian exports from the Black Sea.
Egypt is one of the world’s top wheat importers and last year bought about 80 percent of those imports from Russia and Ukraine. Russia’s Feb. 24 invasion of Ukraine disrupted shipments and sped up a rise in global commodity prices, delivering a financial shock to Egypt.
European traders said on Friday buyers from China purchased large volumes of Australian and French wheat this week in a sign that the Asian country is taking advantage of a recent dip in prices to fill its large needs.
Soybean exports from Brazil are expected to total 91.5 million tons in 2023, up from the 77.2 million estimated for 2022, as the world’s biggest supplier prepares to plant a super crop.
The projection, made by private consultancy Safras& Mercado on Friday, reflects bullish yield and acreage forecasts for the next season, which comes after one in which a drought spoiled part of the crop.
Large speculators cut their net long position in CBOT corn futures in the week to July 19, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and cut their net long position in soybeans.
Speculators have sold Chicago corn in 11 of the last 13 weeks after maintaining huge long positions for the better part of two years, and now their bullish bets are just one-third as large as the year’s high.
Last week’s story was very similar to the previous week, where corn futures rose and then fell within the period, but the selling was clearly heavier on the way down than any buying on the way up.
In the week ended July 19, money managers cut nearly 26,000 CBOT corn futures and options contracts off their net long position, which fell to 125,303 contracts, the lowest since September 2020.
Friday’s data from the US Commodity Futures Trading Commission showed that funds’ net selling in corn was almost entirely due to the reduction of gross longs, which has been strong in the latest five weeks. Most-active CBOT corn futures had risen 1.5 percent in the week.
Other reportable speculators’ net long position in CBOT corn is the smallest since May 2020 at 37,084 futures and options contracts, equivalent to 185 million bushels. Traders in that group expanded their small net short position in CBOT soybeans, which they have held for five weeks now.
