Wheat hits 1-week high on fears of escalating Russia-Ukraine war
Recasts; updates prices, adds quotes, adds byline, changes dateline from previous PARIS/BEIJING
By Julie Ingwersen
CHICAGO, Nov 19 (Reuters) - U.S.wheat futures rose for a third straight sessionon Tuesday, setting a one-week high on fearsof an escalating war in the Black Sea breadbasket region given rising tensions between Moscow and Washington over Ukraine, analysts said.
But soybean futures fell, with the benchmark contract dipping back below $10 a bushel, as favorable Brazilian weather bolstered expectations for a bumper crop in the world's No. 1 soy producer. Corn futures were modestly lower, caught between strength in wheat and declines in soybeans.
As of 12:15 p.m. CST (1815 GMT), Chicago Board of Trade December wheat WZ24 was up 2-1/4 cents at $5.49-1/2 per bushel. January soybeans SF25 were down 13-3/4 cents at $9.96 a bushel and December corn CZ24 was down 1-1/2 cents at $4.27-3/4 a bushel.
Wheat rose as Ukraine used U.S. long-range missiles to strike Russian territory, taking advantage of newly granted permission from the outgoing Biden administration on the Ukraine war's 1,000th day.
"Wheat prices added a bit more war premium again this morning on the chance that we could see this escalation result in tit-for-tat attacks on export infrastructure and/or the ships themselves," StoneX Chief Commodities Economist Arlan Suderman wrote in a client note.
"Fear levels are still relatively low, but it is a possibility that’s on the minds of traders," Suderman said.
Meanwhile,Ukraine's wheat harvest may increase to up to 25 million metric tons next year from an expected 22 million tons this year thanks to a larger sowing area, first deputy agriculture minister Taras Vysotskiy told Reuters in the ministry's first official forecast for next year's harvest.
Ukraine harvested 22 million tons of wheat in 2024 versus average harvests of 25 million to28 million tons before the war.
Soybean futures fell on expectations of hefty supplies from South America, specifically Brazil, where planting of the 2024/25 soybean crop is about80% complete. Oilseed lobby Abioveprojected Brazil's harvest at 167.7 million tons, a volume that should lift soy exports and domestic processing to record highs. The U.S. Department of Agriculture has forecast Brazil's crop at 169 million tons.
The South American countrywill announce farm agreements with China, its biggest trade partner, on Wednesday ahead of scheduled meetings with Chinese President Xi Jinping, Brazil's agriculture minister said, adding the deals would potentially cover fruit, beef and pork.
Reporting by Julie Ingwersen; Additional reporting by Mei Mei Chu in Beijing and Sybille de La Hamaide in Paris; Editing by Andrea Ricci
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