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Corn, wheat fluctuate with Ukraine supply concerns in focus

Published 03/05/2014, 06:11 AM
Corn holds near 6-month high as Ukraine supply concerns remain in focus

Investing.com - U.S. corn and wheat futures swung between small gains and losses on Wednesday, as investors continued to monitor developments surrounding the political and military crisis between Russian and Ukraine.

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov are due to meet in Paris later in the day, in what will be their first face-to-face discussions over the Ukraine crisis.

Russian troops remain in control of Crimea, and while President Vladimir Putin ruled out military action and annexing the region on Tuesday, there is no sign that the soldiers will be returning to their bases.

The U.S. Department of Agriculture expects Ukraine to be the fifth-biggest wheat exporter and the third-largest shipper of corn in the current marketing year.

A disruption to supplies from Ukraine could mean increased demand for U.S. grains.

On the Chicago Mercantile Exchange, corn futures for May held in a range between $4.8063 a bushel and $4.8363 a bushel. Corn prices last traded at $4.8388 a bushel during U.S. morning hours, up 0.1%.

The May corn contract rallied to $4.8500 a bushel on Tuesday, the most since September 3, before settling at $4.8420 a bushel, up 2.92%.

Ukraine is forecast to export 18.5 million tonnes of corn in the current marketing season, representing 16% of global trade, according to the USDA.

Meanwhile, wheat for May delivery dipped 0.05% to trade at $6.4288 a bushel.

The May wheat contract jumped to $6.4560 a bushel on Tuesday, the highest since December 10, before trimming gains to settle up 1.9% at $6.4340 a bushel.

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The USDA projected that Russia and Ukraine will produce a combined 74 million tonnes of wheat in the 2013-14 marketing season and export a total of 26.5 million tonnes of the grain, representing 17% of world trade.

According to the USDA, Ukraine is forecast to export 10 million tonnes of wheat in the current season, while Russian wheat shipments are expected to total 16.5 million tonnes.

Elsewhere on the CBOT, soybeans futures for May delivery inched down 0.1% to trade at $14.2238 a bushel. Prices of the oilseed advanced 0.98% on Tuesday to settle at $14.2300 a bushel.

The May contract hit a six-month high of $14.4540 a bushel on February 27.

Soy prices have been well-supported in recent weeks as hot and dry conditions in key growing regions in Brazil and Argentina fuelled concerns over crop prospects.

The South American counties are major soybean exporters and compete with the U.S. for business on the global market. Crop losses in Brazil and Argentina could mean increased demand for U.S. supplies.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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