Wheat, Corn Surge on Fears Ukraine Unrest May Cut Exports
A wheat field in Ukraine during last summer’s harvest. Wheat prices rose 2.9% and corn gained 2.1% Friday. Bloomberg News
Wheat prices rose 2.9%, the biggest gain in three weeks, amid concerns that unrest in Ukraine will slow grain exports from the country and that cold weather will hurt U.S. output.
Corn prices also climbed Friday, reaching a fresh five-month high.
Grain traders speculated that Ukraine’s shipments of wheat and corn could decline amid mounting tensions between the country and Russia, which could boost overseas demand for U.S. crops. So far, the unrest has yet to directly affect exports from Ukraine, which is expected by the U.S. Agriculture Department to be the fifth-biggest exporter of wheat and the third-largest shipper of corn in the current marketing year.
“This unrest could disrupt the ports and shipments, and if that would be the case, the U.S. could see a substantial amount of demand,” said
chief market strategist at brokerage Zaner Group in Chicago. “At this point, the U.S. and [Ukraine] are the two most competitive countries as far as wheat and corn are concerned. It would be a really big deal” if Ukraine’s exports fell.
Wheat for March delivery at the Chicago Board of Trade rose 16.75 cents to $5.99 a bushel, notching the biggest percentage increase since Feb. 4.
Corn futures for March delivery rose 9.50 cents, or 2.1%, to $4.5750 a bushel in Chicago trading, the highest close for a front-month contract since September.
Wheat prices also gained Friday on speculation that freezing weather in the central U.S. will hurt winter-wheat crops that lack a protective blanket of snow. Temperatures in parts of the Midwest are expected by private forecaster Telvent DTN to be much below normal for this time of year through Wednesday.
While snow is predicted to fall in the coming week, offering some protection for crops in major wheat-producing states such as Kansas, low temperatures the past two months have potentially damaged plants that were seeded in the fall and are set to start growing again in March and April.
Friday’s gain marked the first for wheat futures in four sessions. Prices had stumbled 6% since Feb. 19, weighed down by concerns about increased global production of the grain. Canada harvested a record crop last year, while Australian growers collected their third-biggest crop.
Soybean futures gained, following corn and wheat higher, as stockpiles before the harvest will still be at historically low levels amid rising demand for U.S. inventories. Soybean futures for March delivery added 20.75 cents, or 1.5%, to $14.1425 a bushel in Chicago.
Write to Tony C. Dreibus at tony.dreibus