Bloomberg News

Wheat Jumps to 13-Month High on Export Concern Amid Ukraine Woes

May 05, 2014

Wheat futures rose to a 13-month high as violence in Ukraine spread, heightening concerns that grain exports will be disrupted amid conflict with Russia.

Four Interior Ministry troops were killed in Slovyansk in Ukraine’s east as violence spread today, while clashes in Odessa yesterday left two people injured. Odessa and four other Black Sea ports handle 87 percent of Ukrainian grain exports, according to Morgan Stanley.

“The continued spiral into what looks like potentially a civil war in the region is a concern and cause for speculative buying,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “As violence continues to spread in the country, it could be an impediment to timely shipments.”

Wheat futures for July delivery rose 1.8 percent to close at $7.29 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price reached $7.405, the highest for a most-active contract since March 28, 2013.

Ukraine grain exports are “unlikely to be affected” by tensions in the region, Michael Bertram, a Kiev-based director at NCH Capital Inc., said on April 29. Russia is forecast to be the fifth-largest wheat exporter, followed by Ukraine, according to the U.S. Department of Agriculture.

Demand for wheat from the U.S., the top exporter, and Canada may rise amid the Eastern European turmoil, Grow said.

U.S. farmers may harvest the smallest winter-wheat crop since 2006 after freezing temperatures and drought conditions damaged yields in the Great Plains, according to a survey of 20 analysts and traders by Bloomberg News.

Hard red winter wheat futures for July delivery climbed 1.2 percent to $8.32 a bushel in Chicago. Earlier, the price reached $8.43, the highest since Feb. 1, 2013.

As of March 31, wheat stockpiles in Canada, the second-largest exporter, jumped 47 percent from a year earlier after a record harvest, government data showed today.

Corn futures for July delivery rose 1.7 percent to $5.08 a bushel. Soybean futures for July delivery fell 0.5 percent to $14.6325 a bushel.

To contact the reporter on this story: Megan Durisin in Chicago at mdurisin1@bloomberg.net

To contact the editors responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net


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