Posted on January, 20, 2022 at 09:18 am
Wheat futures surged in overnight trading amid tensions between Russia and Ukraine, the largest and third-biggest exporters of the grain, respectively.
Russia has been moving troops in what some consider a hostile move toward Ukraine.
U.S. Secretary of State Antony Blinken spoke yesterday with Russian Foreign Minister Sergey Lavrov in a bid to de-escalate the “tensions surrounding the deeply troubling Russian military buildup in and near Ukraine,” according to a statement from the U.S. State Department.
Canada has reportedly sent some special operations teams to Ukraine and the U.S. is reportedly weighing increased measures to help Ukraine should Russia attack.
An attack on Ukraine or even rising tensions between two of the world’s largest wheat exporters likely will disrupt the markets.
Also giving prices a boost is continued dry weather in the U.S. Southern Plains.
Little or no rain has fallen in the region in the past 30 days, according to data from the National Weather Service’s precipitation page.
About 58% of Kansas, the biggest producer of the grain, was suffering from drought conditions last week, up from 52% a week earlier and only 15% three months ago, according to the U.S. Drought Monitor.
Wheat for March delivery jumped 13½¢ to $7.82½ a bushel overnight on the Chicago Board of Trade while Kansas City futures gained 15¼¢ to $7.88 a bushel.
Soybean and corn futures also surged overnight on reports that more hot weather is headed to parts of Brazil and Paraguay, which should further stress crops in the South American countries.
About a fourth of Brazil and 70% of Paraguay are suffering from drought stress, Commodity Weather Group said in a report.
“Relief minimal for southern Brazil (and) Paraguay drought areas for at least another week,” which likely will result in diminishing yield potential, the forecaster said.
In Argentina, temperatures hit record highs, topping 100°F., but rainfall this week in about half of the country’s corn and soybean growing areas will linger the next couple of days, CWG said.
Soybean futures for March delivery jumped 14¼¢ to $13.75½ a bushel overnight. Soymeal gained $4.10 to $394.20 a short ton, and soybean oil futures added 0.91¢ to 59.99¢ a pound.
Corn futures for March delivery surged 7¢ to $6.06½ a bushel.
Source: Successful Farming