(Bloomberg) – Corn extended its retreat from a six-month high on speculation that exports from Ukraine, set to be the third-biggest shipper, will be unaffected by Russia’s military intervention in Crimea.
The contract for May delivery fell as much as 1.5 percent, the most since Feb. 27, to $4.815 a bushel on the Chicago Board of Trade, and was at $4.8325 by 12:49 p.m. in Singapore. Futures reached $5.025 on March 7, the highest level since Aug. 27. That capped a 5.5 percent weekly advance, the biggest gain since the period ended May 31.
Corn has rallied since Russia’s incursion into Ukraine’s Crimean peninsula, increasing risks of an escalating conflict and disruption of supplies from the region. Odessa and four other Black Sea ports, which handle 87 percent of Ukrainian grain exports, are a long way from Crimea and shipments are unlikely to be disrupted, Morgan Stanley said in a March 4 report. Western Bulk ASA, which operates more than 120 commodity ships, said last week cargo movements were unaffected.
Some reports are “indicating that Ukrainian farmers are busily selling grain to address cash flow issues,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a research note today. Markets are also looking forward to the monthly supply and demand data from the U.S. Department of Agriculture later today, he said.
Ukraine may export 18.5 million tons of corn in 2013-2014, placing it behind the U.S. and Brazil, according to the USDA. Global production will reach 966.6 million tons this year, while stockpiles will total 157.3 million tons, up 17 percent from a year earlier and the highest since 2001, USDA data show.
Wheat for May delivery dropped as much as 0.8 percent to $6.49 a bushel in Chicago, before trading at $6.5075. Soybeans declined 0.7 percent to $14.4775 a bushel.
