Wheat lower as Ukraine escalation jitters ease
Updates at 1214 GMT, changes byline/dateline
By Gus Trompiz and Mei Mei Chu
PARIS/BEIJING, Nov 20 (Reuters) -Chicago wheat futures eased on Wednesday, moving back from a one-week high as fears about escalation in the war between Ukraine and Russia receded, while a rebound in the dollar underscored export competition.
March wheat WH25 on the Chicago Board of Trade (CBOT) was 0.6% down at $5.64-1/4 a bushel at 1214 GMT, breaking a three-day rally that took the contract to a one-week peak on Tuesday.
Ukraine used U.S. long-range missiles to strike Russian territory on Tuesday, taking advantage of newly granted permission from the outgoing Biden administration on the Ukraine war's 1,000th day.
The news revived concern about crucial Black Sea supply, but like in previous war developments market reaction was tempered by the absence of immediate disruption to grain trade.
"Our expectation is that this rise of the past couple of sessions will be short-lived. There has been little fundamental information to maintain the rally unless (Russian President Vladimir) Putin attacks the grain infrastructure in Ukraine," said Andrew Whitelaw, an analyst at agricultural consultants Episode 3 in Canberra.
The dollar USD= rose on Wednesday after a two-day drop to move back towards a one-year peak, making U.S. grain more expensive overseas. FRX/
Russian and Ukrainian wheat exports remained brisk and the arrival of southern hemisphere crops was expected to maintain stiff competition in wheat export markets.
Improving supply prospects for next year were also helping cap wheat prices.
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, the first deputy agriculture minister Taras Vysotskiy told Reuters.
U.S. winter wheat crop conditions improved more than expected last week following much-needed rain, the U.S. Department of Agriculture (USDA) said on Monday.
Chicago soybeans and corn also eased, with continued pressure from favourable crop conditions in South America.
CBOT January soybeans SF25 were down 0.7% at $9.91-1/4 a bushel and December corn CZ24 was 0.2% off at $4.26-1/4 a bushel.
Brazil is expected to harvest a record 167.7 million tons of soybeans in the 2024/25 season, oilseed lobby Abiove said on Tuesday.
Chinese soybean imports from the U.S. marked a seventh month of growth in October, as buyers accelerated shipments fearing trade tensions.
But U.S. export prospects are seen as uncertain given Brazil's expanding trade with China and the possibility President-elect Donald Trump will target China with fresh tariffs when he returns to the White House in January.
Prices at 1214 GMT | |||
Last | Change | Pct Move | |
CBOT wheat Wv1 | 564.25 | -3.50 | -0.62 |
CBOT corn Cv1 | 426.25 | -1.00 | -0.23 |
CBOT soy Sv1 | 991.25 | -7.25 | -0.73 |
Paris wheat BL2Z4 | 216.25 | -1.75 | -0.80 |
Paris maize EMAc1 | 210.00 | -1.25 | -0.59 |
Paris rapeseed COMc1 | 533.75 | -7.00 | -1.29 |
WTI crude oil CLc1 | 69.86 | 0.47 | 0.68 |
Euro/dlr EUR= | 1.06 | 0.00 | -0.38 |
Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per metric ton | |||
Reporting by Gus Trompiz in Paris and Mei Mei Chu in Beijing; Editing by Eileen Soreng and Mark Potter
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