Wheat retreats as Ukrainian shipments continue despite Russia’s pullout

An employee unloads wheat grains inside a storage in the village of Zghurivka, amid Russia’s attack on Ukraine, in Kyiv region, Ukraine Aug 9, 2022. REUTERS/Viacheslav Musiienko

SINGAPORE  -Chicago wheat futures slid on Tuesday, with the market falling from previous session’s highest level in two weeks, as grain shipments continued from Ukraine despite Russia withdrawing from a U.N.-brokered export pact.

Soybeans gained more ground, climbing to their highest in more than a month, while corn ticked lower.

“While Russia pulled out of the export grain corridor deal from Ukraine, there was still grain flowing out of Ukraine,” Hightower said in a report.

“Deliveries of Ukrainian crops to ports are grinding to a halt, as the agriculture sector becomes more uncertain…”

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.6 percent at $8.77 a bushel, as of 0338 GMT, and corn fell 0.1 percent to $6.90-3/4 a bushel.

Soybeans added 0.5 percent to $14.26-3/4 a bushel, after having climbed to their highest since Sept. 27 at $14.29-1/2 a bushel.

Grain was flowing out of Ukraine at a record pace on Monday under an initiative led by the United Nations aimed at easing global food shortages despite Russia warning it was risky to continue after it pulled out of the pact.

Ukrainian President Volodymyr Zelenskiy said on Monday that his country would continue exporting grain from its Black Sea ports because the shipments offered stability to world food markets.

Moscow suspended its participation in the Black Sea deal on Saturday in response to what it called a major Ukrainian drone attack on its fleet in Russia-annexed Crimea.

But shipments could be interrupted again. Lloyd’s of London insurer Ascot is suspending writing cover for new shipments using the Ukrainian grains corridor in the Black Sea until it has more clarity about the situation there, a senior official said.

Losses in the wheat market were curbed by dryness hitting the U.S. winter crop.

The U.S. Department of Agriculture (USDA) on Monday rated 28 percent of the U.S. winter wheat crop in good-to-excellent condition, the lowest for this time of year in records dating to 1987, underscoring the effects of persistent drought in the Plains wheat belt.

On the harvest front, the USDA said the U.S. soybean harvest was 88 percent complete, ahead of the five-year average of 78 percent. For corn, the harvest was 76 percent complete, ahead of the average analyst estimate of 75 percent and the five-year average of 64 percent.

Commodity funds were net buyers of CBOT wheat, soybean, corn, soyoil and soymeal futures contracts on Monday, traders said.