Wheat jumps on worries about Black Sea shipments

USDA lowers corn, soybean harvest outlook
calendar icon 14 October 2022
clock icon 2 minute read

US wheat futures rebounded on Thursday from two days of declines on concerns that a Black Sea export corridor deal may not be renewed next month, which could again disrupt grain shipments from Ukraine, reported Reuters.

Corn and soybeans pared earlier losses on spillover support from wheat and follow-through buying after the US Department of Agriculture (USDA) lowered its US harvest outlook for both crops the previous day.

A weaker dollar, which makes US shipments more attractive to importers holding other currencies, offered additional support to grains.

Wheat surged on news that Russia delivered a list of concerns about its Black Sea export corridor deal to the United Nations and is prepared to reject renewal of the deal next month.

The UN-brokered deal had opened a safer path for grain shipments from major exporter Ukraine. Exports had been blocked following Russian President Vladimir Putin's order to invade its neighbour in late February.

"This is the Putin effect. It looks like it's not going to be so easy to keep that export corridor open," said Don Roose, president of US Commodities.

Chicago Board of Trade December wheat futures settled up 10 cents at $8.92-1/4 a bushel after hitting a two-week low earlier in the session.

CBOT December corn was up 4-3/4 cents at $6.97-3/4 a bushel while November soybeans SX2 were down a 1/4 cent at $13.95-3/4 a bushel.

In its monthly supply-and-demand report on Wednesday, the USDA said US corn and soybean crops would be smaller than previously forecast, raising concerns about tight global inventories. But the agency also trimmed its demand outlook, most notably for exports which will likely face stiff competition from South American crop shipments.

The government also cut its outlook for the domestic stockpile of wheat to the lowest in 15 years.

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