Chicago wheat rises as Black Sea attacks support prices

Chicago wheat futures climbed on Monday, propelled by concerns over the potential impact of Russian and Ukrainian attacks on each other's export operations. Corn and soybean prices also nudged upward following strong US export sales last week. The most actively traded wheat contract on the Chicago Board of Trade (CBOT) climbed 1.7% to $6.50-3/4 a bushel at 0304 GMT, up from a 1.4% increase on Friday.

Current prices, while still below the $7 a bushel peak last month, have risen nearly 30% so far in 2023. Ukrainian President Volodymyr Zelenskiy suggested on Friday that Russia was attempting to undermine global food security by targeting Odesa's seaport. Despite challenges, "they do seem to find a way to get the grain out," stated Rod Baker, an analyst at Bendigo Bank Agribusiness in Perth.

The ongoing Black Sea situation, coupled with reduced production compared to last year in major exporting nations, will likely keep prices above $6 a bushel and nearer to $6.50 over the near term. JPMorgan noted that the attacks increase risk due to potential slower loadings, higher insurance costs, and more cautious vessel movements.

The US dollar's decline, near two-month lows, also bolstered Chicago wheat prices, making US exports more competitive. Traders are now eagerly anticipating a US Department of Agriculture report on Tuesday for updated yields, acreage, and production forecasts that could influence prices. Meanwhile, CBOT corn and soybeans also saw gains, rising 0.5% to $4.64-1/2 a bushel and $11.81-3/4 a bushel, respectively.

The potential impact of France's anticipated 35% drop in corn production this year from 9 million metric tons, its lowest since at least 1980, due to heat waves and drought, adds further uncertainty to the market.