Wheat extends rally on Black Sea tensions

Chicago wheat futures rose further on Thursday as concerns persisted over a deepening conflict between leading exporters Russia and Ukraine.

Fears of more disruption to Black Sea trade helped wheat counter pressure from a rising dollar and growing investor worries about an economic recession.

Corn and soybeans edged up, finding some support in steady mineral oil and a rebound in palm oil.

Grain markets were also turning their attention to Friday’s

U.S. Department of Agriculture (USDA) quarterly U.S. grain stocks and annual small grains reports.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.6% at $9.08-1/2 a bushel by 1202 GMT, adding to a 3% rise on Wednesday.

In Europe, December wheat BL2Z2 was up 0.2% at 354.50 euros ($344.64) a tonne after earlier touching a three-month high.

Russia is poised to annex a swath of Ukraine after what Kyiv and the West denounced as illegal sham referendums in occupied territory, while the European Union investigated a leak from Russian gas pipelines it believes was due to sabotage.

Heightened tensions between Moscow and Kyiv, which is supported by Western powers, have fuelled doubts about whether a U.N.-supervised shipping corridor for Ukrainian grain will last.

“The evolution of the situation in the Black Sea remains the main factor explaining the rebound of the last two days,” consultancy Agritel said.

Crop conditions have also lent some support to wheat prices, as dryness hampers planting in the U.S. Plains, harvesting lags in Canada and expectations for Argentina’s upcoming crop are declining.

CBOT corn Cv1 was up 0.2% at $6.71-1/2 a bushel and soybeans Sv1 added 0.6% to $14.17 a bushel.

Grain markets will get an update on demand from weekly U.S. export sales data later on Thursday, ahead of Friday’s widely followed quarterly stocks report.
Source: Reuters (Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Subhranshu Sahu and Jane Merriman)