Crop futures extended their advance on supply fears, with soybeans climbing past $ 17 to the highest intraday level in almost two weeks.

Wheat prices are rising as some of the world’s largest importers seek supplies from alternative shippers after Russia’s invasion of Ukraine’s choked exports from the Black Sea. Soybeans are supported by lower production in South America because of drought and concerns over global oilseed inventories.

India is in final talks to begin wheat shipments to Egypt, the biggest buyer, and is also in negotiations with China and Turkey. Other big importers, including Algeria, Jordan and Morocco, are likely to stay on the lookout for new purchases in order to maintain their domestic stockpiles at reasonable levels.

While wheat cargoes are coming out of Russia, trade from Ukraine is at a near standstill. With little optimism that the war will end soon, prices are likely to remain high, said Tobin Gorey, a strategist at the Commonwealth Bank of Australia.

Ukraine’s winter-wheat harvesting is scheduled from July, but it’s impossible to know how much will be gathered. Sowing is also due to start soon for the corn and sunflower crops and the production outlook is poor, with the war severing transport links, logistics, and seed and fertilizer supplies.

The war has tightened the global availability of crop nutrients, raising concerns over spring sowings of northern hemisphere crops such as corn and soybeans. A work stoppage at one of Canada’s largest railways is also snarling shipments, spurring fears of a broader economic impact if it’s not resolved quickly.

Wheat futures climbed 2.4% to $ 11.46 1/2 a bushel, after jumping 5.2% a day earlier. Soybeans advanced 1.3% to $ 17.12 3/4 a bushel, while corn rose 0.4%.

© 2022 Bloomberg

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