Wheat regains ground with U.S. data, Ukraine war in focus

Chicago wheat rose on Wednesday to recover from a two-day drop as latest Russian strikes on southern Ukraine kept attention to war risks to Black Sea trade while investors adjusted positions before closely watched U.S. inflation data.

Soybeans and corn were also higher.

The most active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was 1.4% up at $5.55-3/4 a bushel by 1139 GMT.

CBOT soybeans Sv1 edged up 0.3% to $11.78 a bushel, and corn Cv1 gained 0.7% to $4.34-1/4 a bushel.

Financial markets are bracing for a U.S. consumer price index reading on Wednesday, seen as a key pointer to the timing of interest rate cuts by the U.S. Federal Reserve.

“The U.S. CPI reading due later today could be important for the U.S. dollar, and consequently, for grain prices,” brokerage Copenhagen Merchants said in a note.

Grain market participants are also gearing up for a U.S. Department of Agriculture supply and demand report and Brazilian agency Conab’s national crop forecasts on Thursday.

News of Russian strikes on southern Ukraine, as Moscow continues to target Ukraine’s energy infrastructure, also encouraged light short-covering in wheat, traders said.

Delays to some Russian export cargoes due to a dispute between a leading merchant and Russian authorities have further created concern this month about vital Black Sea trade, helping push Chicago wheat to a one-month high on Monday.

But data from brokers showed large Ukrainian corn shipments to China were continuing, while Russian wheat exports remained at a high pace.

Expectations of another bumper harvest in Russia this year, despite concern over recent dry weather, were also curbing wheat prices.

Commodity analysis firm Argus has raised its forecast for Russian wheat production by about 2 million tons to 92.10 million.

U.S. winter wheat prospects were seen as favourable, though weather forecasts were being monitored for rain relief in parched parts of the U.S. plains.

“With good supply prospects, millers are not rushing to buy wheat, so the demand is a bit weak,” a Singapore-based trader said.
Source: Reuters (Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Sherry Jacob-Phillips, Varun H K and Vijay Kishore)