Wheat Futures Surge on Russian Crop Worries — Daily Grain Highlights

By Kirk Maltais

--Wheat for July delivery rose 5.8%, to $6.88 a bushel, on the Chicago Board of Trade on Monday, climbing in response to escalated fighting between Russia and Ukraine along with weather issues hitting their winter crops.

--Corn for July delivery rose 1.8%, to $4.60 1/4 a bushel.

--Soybeans for July delivery rose 1.6%, to $12.46 3/4 a bushel.

HIGHLIGHTS

War Zone: Concerns about war escalating between Ukraine and Russia sent wheat surging early Monday. Early Friday, Ukrainian drones attacked the Russian grain export port of Novorossiysk. "The Novo damage is being reported as minimal, but Ukraine appears to be targeting strategic economic targets within Russia, which now includes ag trade," said AgResource in a note. Combined with weather issues affecting crop yields in Russia, global wheat prices have risen.

Storm Schedule: U.S. growing areas are expected to receive heavy rainfall this week, which may keep farmers out of fields. It provided grains with support Monday, support that might grow if the Crop Progress report shows continued slowdown in planting progress. "I don't see panic yet, but concerns are growing," said Arlan Suderman of StoneX in a note. Extended delays could push planting completion to June, which would affect crop yields and push prices up.

INSIGHT

Reduced Exposure: Friday's Commitments of Traders Report from the CFTC showed reduced short positions by funds for grains, a trend that appears to be extending into futures Monday. Friday's report showed funds through the week ended May 14 closing just under 15,000 short contracts in corn, along with nearly 18,000 shorts across various wheat contracts and just over 9,000 shorts in soybeans. Corn and wheat added new long positions, while soybeans closed both long and short positions. The change in balance by managed money comes as planting season progresses in the U.S., as traders look for weather issues to slow planting progress further.

Inspections Decline: U.S. soybean grain export inspections were only a fraction of the previous week's total, according to the USDA latest inspections report. In its latest weekly report, the agency said that soybean inspections for the week ended May 16 totaled 184,218 metric tons. That's down 57% from this time last week. Wheat inspections also fell, dropping 46% to 205,612 tons for the week. Corn inspections, meanwhile, rose to 1.21 million tons for the week, up from 1 million tons. Analysts regarded this week's inspections as mediocre.

AHEAD

--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

May 20, 2024 15:16 ET (19:16 GMT)

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