(Reuters) – U.S. wheat futures rose nearly 1 percent on Monday, extending two-day gains to nearly 3 percent, as escalating tensions in Ukraine raised fears over potential curbs to exports.
Soybeans fell for the second straight session as a bumper Brazilian harvest and weaker demand from China weighed, while corn edged lower.
Chicago Board of Trade May wheat futures rose 0.8 percent to $6.93 a bushel by 0245 GMT, having closed up 2 percent on Friday.
“I feel that support is stemming from possible escalation regarding the tensions between Ukraine and Russia,” said Vanessa Tan, investment analyst at Phillip Futures in Singapore.
“Going forward, this could result in further sanctions imposed by Western powers on Russia. This translates into higher risk premium for wheat prices as it could mean further disruption to shipments from the Black Sea region,” said Tan.
Russian state media said Crimeans voted overwhelmingly to break with Ukraine and join Russia on Sunday, as Kiev accused Moscow of pouring forces into the peninsula and warned separatist leaders “the ground will burn under their feet”.
While port activity in Ukraine has continued normally and farmers have started spring sowing, talk that traders are holding back from fresh export deals and that farmers are struggling to finance crop sowing has made grain markets nervous. Driven by these reports, wheat futures have notched gains of more than 1 percent in four of the last seven sessions.
Continued dry weather across the U.S. Plains is also weighing on the condition of the winter crop, analysts said.
May corn futures fell 0.1 percent to $4.85-1/2 a bushel.
May soybean futures fell 0.2 percent to $13.85-1/4 a bushel, having closed down 0.56 percent on Friday.
Soybean is under pressure as a bumper harvest in Brazil hits the markets at a time when Chinese demand looks weaker, analysts said.
Chinese soybean importers cancelled up to 600,000 tonnes of South American soybean cargoes for shipment between March and May, two trade sources said last week, as an outbreak of bird flu in the country and negative crush margins curb demand.
The National Oilseed Processors Association’s monthly crush report due Monday should show that NOPA’s U.S. members crushed 140.9 million bushels of soybeans in February, down 10 percent from January, a Reuters poll of 11 analysts showed.
