Wheat near two-month high on fears war in Ukraine will intensify

Wheat futures in Chicago traded near the highest level in more than two months on concerns that Russia will intensify its war in Ukraine, posing a threat to planting and harvesting in the key producer and reducing exports through the Black Sea.

The food staple was down just 0.3% from a close of $8.0075 a bushel on Monday, which was the strongest since Nov. 23. Prices jumped on Friday as Russia launched its biggest barrage of missile attacks on the country so far this year. Infrastructure damage or a worsening of the conflict would hinder shipments, which are running about a third behind the previous season. 

That export pace has improved from the start of the season as the Black Sea Grain Initiative bolsters seaborne shipments. The deal is up for renewal in mid-March and its future is unclear. The UN’s coordinator for the initiative called for an extension in meetings with senior government officials and diplomats last week, according to a press briefing. 

Ukraine approved a proposal to boost the minimum tonnage of grain-export ships using the crop corridor to 25,000 tons. Still, it may take about 1.5 months until bigger-sized ships boost grain and oilseed export volumes due to the slow pace of ship inspections, according to the infrastructure ministry.

Elsewhere in markets, corn and soybeans were little changed. Soybeans have been on an uptrend since October as drought cut the crop in Argentina and hurt production in the far south of Brazil. Top grower Brazil is still heading for record output. Further forward, much will depend on the acreage and weather for the corn and oilseed crops in the US and Canada this summer.