Traders continued to monitor weather outlooks for the Midwest corn and soybean belts. Hot weather this week "is promoting a rapid pace of corn and soybean development," the U.S. Department of Agriculture said in a daily weather note, while forecasts called for rains in the region later next week.
Wheat surges on Black Sea shipping attacks
Chicago wheat prices jumped more than 5% on Wednesday and European wheat reached a one-year high amid escalating shipping attacks in the Sea of Azov, a major export route for Russian wheat.
As of 1:01 p.m. CDT (1801 GMT), Chicago Board of Trade September soft red winter wheat WU26 was up 35-1/4 cents at $6.80-1/4 per bushel while K.C. September hard red winter wheat KWU26 rose by its daily 45-cent limit to $7.23 a bushel, the contract's highest since May 19.
Wheat set the tone in the grains complex. Euronext wheat futures jumped, with benchmark September BL2U6 settling 6.5% higher at €231.5 ($265.44) per ton.
Russia and Ukraine stepped up their battle over the Black Sea and key trade routes on Wednesday, with Moscow killing three people in an attack on the Ukrainian port city of Odesa and Kyiv's drone forces striking Russian shipping.
Russia accused Ukraine of terrorism over its increasing attacks on shipping in the Sea of Azov, the route for a quarter of Russia's grain exports.
"The big question the wheat market is now scrambling to answer is whether the expansion in Ukrainian strikes in the Black Sea will ultimately spread to the most critical Russian ports, like Novorossiysk, the top outlet for Russian wheat exports," StoneX senior commodities economist Mike Castle wrote in a client note.
Managed commodity funds hold a large net short position in CBOT wheat futures, leaving the market vulnerable to short-covering rallies.
Corn and soybeans follow the stronger trend
CBOT December corn CZ26 was up 9-1/4 cents at $4.69-3/4 a bushel and November soybeans SX26 were up 10-3/4 cents at $12.01-3/4 a bushel.
Soybean futures drew additional support after the National Oilseed Processors Association said its members crushed 214.340 million bushels of soybeans in June, topping a range of analyst expectations.
NOPA also reported a larger-than-expected drop in U.S. June soyoil inventories to an eight-month low of 1.501 billion pounds, below all trade estimates. CBOT August soyoil futures BOQ26 turned higher after the data was released.
DBA•
