Wheat futures slip, but tension in Russia-Ukraine cushions decline

DESPITERECORDING A STRONG PERFOR MANCE DURING THE WEEK, WHEAT FUTURES CLOSED plunging into bearish territory. However, heightened tensions between Russia and Ukraine, the world leading wheat suppliers, limited losses, analysts observed.

It came after Joe Biden, U.S. president, hinted that there was a high indication that Russia was planning to invade Ukraine in the next few days and was preparing a pretext to justify it, after Ukrainian forces and pro-Moscow rebels exchanged fire in eastern Ukraine.

The most-active wheat contract on the Chicago Board of Trade (CBOT) shed 0.4 percent at $8.011/2 a bushel, after gaining over three percent in the previous session.

On the other hand, soybeans maintained its upward trend for the fifth consecutive week as it gained 0.1 percent to $15.93 a bushel, while corn lost 0.4 percent to $6.471/4 a bushel.

The Buenos Aires Grains Exchange noted that Argentina’s agricultural heartland, recently hit by a drought, is affecting corn and soybean production,with the South American country expected to experience yet another week of scant rainfall before heavier precipitation towards the end of February.

According to market reports, the world’s top exporter of processed soybean and second largest corn exporter behind the U.S, has been suffering from drought linked to the La Niña climate pattern, which has prompted deep cuts in forecasts for harvests of the two grains in recent months.

Meanwhile, strong export demand in the global market has been reported to have lent support to soy futures as consumption of the commodity surged.

The United States Agriculture Department (USDA) reported that export sales of soybeans totalled 2.8 billion tonnes in the week ended February 10, up from 2.4 billion a week earlier.

The USDA also noted that private exporters reported the sale of 120,000 tonnes of soybeans to unknown destinations, the third day in a row a deal for U.S. soy was announced.

For corn output, the International Grains Council cut its forecast for 2021/22 global corn production, partly driven by downgraded outlooks for top producers, Brazil and Argentina.

In its monthly update, the intergovernmental body reduced the forecast by four million tonnes to 1.203 billion tonnes.