Wheat drops to 18-month low on Black Sea grain deal optimism

SINGAPORE: Chicago wheat futures slid for a second session on Thursday to hit their lowest in 18 months, as rising expectations of a Black Sea deal to ship Ukrainian grains weighed on the market.

Soybeans and corn ticked higher on support from a further reduction in estimates for Argentina’s drought-ravaged crops.

“Talks are ongoing to extend the export pact beyond mid-March for Ukraine to export out of Black Sea terminals,” Hightower said in a report. It added that the wheat market had been oversold and it was starting to look cheap.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.3% at $6.85-1/2 a bushel, as of 0345 GMT, after dropping earlier in the session to its lowest since September 2021 at $6.83-1/2 a bushel.

Soybeans rose 0.1% to $15.19-1/4 a bushel and corn added 0.2% at $6.26-1/2 a bushel.

The US wheat market is under pressure from Russian export competition and expectations that a wartime grain corridor from Ukraine will be extended beyond this month, increasing available global supplies.

Read more: PSX witnesses volatile session, KSE-100 gains 24 points

Ukraine’s president and United Nations Secretary-General Antonio Guterres called on Wednesday for the extension of the deal with Moscow that has allowed Ukraine to export grains via Black Sea ports during Russia’s invasion.

Top UN trade official Rebeca Grynspan will meet senior Russian officials in Geneva next week to discuss extending the deal, a UN spokesperson said on Wednesday.

In the soybean market, Argentina’s Rosario grains exchange slashed its forecast for the country’s 2022/23 harvest on Wednesday, dropping it to the lowest estimated this century and warning of future cuts as the country’s key agricultural region battles an ongoing drought.

The new estimates put the current cycle’s soy crop at 27 million tonnes, below the 34.5 million tonnes seen in last month’s forecast and under the 27.5 million tonnes harvested in the 2000/2001 season, when a separate exchange, the Buenos Aires grains exchange, began keeping records.

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