UAE optimistic Russia-Ukraine talks will achieve positive breakthrough

Wheat prices have hovered close to multi-month lows as traders prepare for talks between Russia and Ukraine. These discussions could potentially increase global grain supplies by reopening Black Sea shipping routes. Corn and soybean futures, meanwhile, have climbed in anticipation of USDA supply and demand data set to be released later on Tuesday.

The primary wheat contract on the Chicago Board of Trade has risen 0.2% to $5.89 a bushel, after dipping to a low of $5.85 on Friday, marking its lowest level since June 30. Over the past week, Russian wheat export prices have declined due to dwindling demand, according to analysts. Meanwhile, traders are monitoring the upcoming peace negotiations in Abu Dhabi on November 10-11.

Attacks on Black Sea shipping have hampered grain exports from Russia and Ukraine in recent months, but the market has not tightened as some had anticipated. Some funds have been accumulating short positions, possibly influenced by headlines about the peace talks, which has caused prices to drop but left the market susceptible to a sudden short-covering rally.

Nick Carracher, CEO of consultants Lachstock, stated that they are approaching a baseline support level. He added that incoming supplies from Australian and Argentine harvests in the coming months would help keep prices from falling further, even if Black Sea exports stay constrained. Lithuania has announced that Russian and Belarusian grain shipped through the port of Klaipeda will be held until tests confirming its origin are completed.

This move could delay exports by several months. In other grains, CBOT corn climbed 0.4% to $4.41 a bushel, while soybeans increased 0.2% to $11.91 a bushel. Corn has fallen roughly 20% since early September, while soybeans have dropped about 10%. Experts anticipate the USDA to raise its forecast for the US soy harvest to a record high, while lowering its outlook for US corn production, though both crops are expected to be among the largest ever.

As of Sunday, the USDA reported that 92% of the US soybean harvest and 81% of the corn harvest were complete. Favorable weather conditions in Brazil have also fueled predictions of bountiful soy and corn crops in that country.