Wheat extends gains as missile attacks keep Black Sea risks in focus

Chicago wheat rose for a fifth straight session on Thursday after Ukraine reported that Russia had fired an intercontinental ballistic missile, adding to concerns about escalation in the war between the Black Sea grain exporters.

Corn was almost unchanged, while soybeans steadied after hitting a two-week low due to bumper crop prospects in Brazil and worries over the impact of incoming U.S. President Donald Trump’s trade and biofuel agendas.

Russia launched an ICBM during an attack on Ukraine on Thursday, Kyiv’s air force said, in the first known use in the war of a powerful weapon designed to deliver nuclear strikes thousands of kilometres away.

The use of the weapon, not immediately confirmed by Moscow, comes after Ukraine fired Western missiles into Russian territory this week following permission from the outgoing U.S. government.

The signs of military escalation have revived market fears about Black Sea exports, though price reaction has been tempered by the absence of immediate disruption to shipping.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.44% at $5.74-3/4 a bushel by 1237 GMT.

“The market is building risk premium on the possibility that ships might become unwilling to move through the Black Sea,” StoneX analyst Arlan Suderman wrote in a note.

Continuing shipments of competitively priced Russian and Ukraine wheat through the Black Sea remained a curb on prices, along with improvements in growing conditions in major production zones including the United States and Europe.

CBOT soybeans Sv1 were up 0.20% at $9.92-1/2 a bushel, after falling to a two-week low on Wednesday. Corn Cv1 was down 0.06% at $4.30 a bushel.

Both markets are grappling with favourable crop production prospects in South America and widespread uncertainty over the course of the next U.S. administration under Trump.

Chinese soybean imports from the United States more than doubled year-on-year in October as buyers fearful of Trump’s trade policies accelerated shipments.

However, CBOT soyoil futures BOZ24 have been pressured by concerns that Trump’s policies may be less favourable for biofuel.

“Macro markets are in waiting mode: waiting to see how Russia-Ukraine plays out, waiting for data, waiting for Trump to take office,” Peak Trading Research said.
Source: Reuters (Reporting by Gus Trompiz in Paris and Peter Hobson in Canberra; Editing by Sherry Jacob-Phillips, Janane Venkatraman and Varun H K)