Wheat Extends Biggest Advance in a Week Amid Ukraine Concerns
Category: Grains
(Businessweek) – Wheat climbed for a fourth day on speculation that escalating tension between Russia and Ukraine may disrupt supplies from the Black Sea region and boost demand for the U.S. grain.
The contract for July delivery rose as much as 0.7 percent to $7.01 a bushel on the Chicago Board of Trade, and was at $6.9825 by 10:23 a.m. in Singapore. Futures jumped 2 percent yesterday for the biggest increase since April 15. A fourth day of gains would be the longest such streak since Feb. 19.
U.S. Secretary of State John Kerry accused Russia of not keeping its word on an accord forged in Geneva last week after Ukraine’s killing of five rebels spurred Russia’s military to begin new drills on the nations’ shared border. The U.S. is the top wheat shipper, while Russia ranks fifth followed by Ukraine.
“The escalating tensions will make things worse for the grain exporters,” said Vanessa Tan, an analyst at Phillip Futures Pte in Singapore, referring to Russia and Ukraine. “These renewed tensions put more fears in the wheat market and could curb exports going forward.”
In the week ended April 17, U.S. export sales for delivery before May 31, 2015, doubled to 610,765 metric tons from a year earlier, U.S. Department of Agriculture data show.
Drought in key U.S. growing areas is also bolstering prices, Tan said.
As much as 40 percent of the U.S. crop faces stress in the next 10 days, Commodity Weather Group LLC in Bethesda, Maryland, said in a report dated yesterday. Drought intensified in the Great Plains in the week ended April 22, according to the U.S. Drought Monitor.
Soybeans for July delivery rose 0.2 percent to $14.735 a bushel, trimming the biggest weekly decline since March 14. Corn climbed 0.4 percent to $5.0925 a bushel, poised to gain 1.8 percent this week.
