Wheat and corn futures in the United States fell on Wednesday as Ukrainian officials gave upbeat assessments of their peace talks with Russia, raising the prospect of the Black Sea region opening up for grain exports soon.
Soybeans rose as the market closely monitored drought conditions in South America, fueling fears of a supply shortage.
The most active wheat contract on the Chicago Board of Trade (CBOT) (Wv1) was down 0.24 percent at $11.51-1/2 a bushel at 0408 GMT, after rising more than 5% the previous session.
Ukraine and Russia have substantial grain stocks. This stockpile will be available for shipping as soon as the war ends.
On Wednesday, Ukrainian President Volodymyr Zelensky said peace talks sounded more realistic. Still, more time was needed, as Russian airstrikes killed five people in Kyiv, and the number of refugees displaced by Moscow’s invasion reached 3 million.
Due to Russia’s military invasion, Ukraine may plant 4.7 million fewer hectares this spring, a 39 percent decrease, according to the APK-Inform agriculture consultancy.
Corn (Cv1) fell 0.46 percent to $7.54-1/2 per bushel, while soybeans (Sv1) gained 0.63 percent to $16.69-1/4 per bushel.
Soybean has benefited from the rise in edible oil prices and the expected drop in South American output.
The restrictions imposed by China, the world’s largest grain buyer, to contain the coronavirus outbreak may limit corn and soybean imports in the short term.
On March 15, China reported 1,860 new local symptomatic COVID-19 cases for the fourth consecutive day, with most new infections still concentrated in the northeast.
Grains traders were also keeping an eye on crude oil, which rebounded on Wednesday after falling more than $1 a barrel earlier in the day, as Russia’s invasion continued to dominate volatile trading.
Oil fell sharply on Tuesday, adding to Monday’s loss, as various factors weighed on sentiment, including talks between Russia and Ukraine, a potential slowdown in Chinese demand, and trade unwinding ahead of the Federal Reserve’s expected rate hike Wednesday.
Both West Texas Intermediate crude, the U.S. oil benchmark, and Brent crude, the global model, settled below $100 per barrel on Tuesday, a far cry from the more than $130 they fetched just over a week ago.
WTI finished the day at $96.44, a 6.38 percent loss. It traded as low as $93.53 during the session. Brent settled at $99.91 per barrel, down 6.54 percent from the previous day’s low of $97.44. Early last week, WTI reached a high of $130.50 per barrel, while Brent reached a high of $139.26 per barrel. So far, the United States and Canada have banned Russian energy imports, while the United Kingdom has stated that it will phase out Russian imports.
However, other European countries that rely on Russian oil and gas have not taken similar steps.
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