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Wheat firms on Ukraine crisis, soybeans drop after surge

Chicago wheat rose on Monday on concerns that a possible armed conflict between Russia and Ukraine could disrupt wheat exports via the Black Sea.

Soybeans fell from 9-month highs seen last week as traders awaited more news about the impact on trade flows of dry weather which is expected to reduce crops in South America. Corn also fell.

Chicago Board of Trade most-active wheat Wv1 was up 0.4% at $8.01-1/4 a bushel at 1204 GMT, after climbing to its highest since Jan. 26 at $8.13-1/2 earlier on Monday.

Soybeans fell 1.7% to 15.55-1/4 a bushel, while corn Cv1 fell 0.3% to $6.48-1/2 a bushel.

The United States said on Sunday that Russia could invade Ukraine at any time and might create a surprise pretext for an attack.

“The political tension between Russia and Ukraine is supporting the wheat market, with great uncertainty as the political developments are becoming harder to analyse,” said Matt Ammermann, StoneX commodity risk manager.

“The statements from the U.S. government that a Russian invasion of Ukraine could come soon have caused a lot of worry. Any conflict and sanctions afterwards could interrupt Black Sea wheat export shipments and lead to a transfer of export demand to the EU and United States.”

“We must expect a volatile week in wheat markets.”

Safras & Mercado became the latest private forecaster in Brazil to cut its Brazilian soybean crop estimate following drought.

“Soybeans are seeing a pullback today after their strong rises last week on the repeated forecasts of smaller South American crops,” Ammermann said.

“The market still has a strong focus on the South American crop problems, but is awaiting more news to maintain the upward momentum, especially about actual soybean export demand shifts to the United States.”

“Corn is also pausing today, torn between downward pressure from the falling soybean market and upward pressure from firm wheat futures.”
Source: Reuters (Reporting by Michael Hogan in Hamburg; Additional reporting by Naveen Thukral in Singapore; Editing by Jan Harvey)

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