Thursday, March 28

Wheat slides 3% on Ukraine export deal extension


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PARIS/SINGAPORE — Chicago wheat dropped to a

2-1/2-month low on Thursday after the United Nations announced an agreement to

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maintain a grain corridor for exports from war-torn Ukraine.

News that the export deal will run beyond its initial period that expires on

Nov. 19 also pushed corn lower as flows of Ukrainian grain will now likely

continue to reach world markets in the short term.

The most-active wheat contract on the Chicago Board of Trade (CBOT)

was down 2.7% at $7.96-1/2 a bushel by 0957 GMT, after falling earlier in the

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session to its lowest since Sept. 1.

The United Nations Secretary General said on Thursday he welcomed an

agreement by all parties to extend the Black Sea grain deal, which has allowed

Some 10 million tons of grain to be shipped from Ukrainian ports since August.

Ukraine and Turkey said the agreement would extend the corridor for another

120 days, while Russia’s deputy foreign minister was quoted as saying Moscow

was not going “to cut off” the corridor deal.

“The renewal of the deal is going to put some extra pressure on wheat,

Although most of the market had been banking on an extension,” a European trader

said.

“Corn prices could be pressured as the renewal of the deal will allow

several million tons more corn to reach the market.”

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Expectations had grown in the past week that the corridor deal would hold,

with a UN source saying on Wednesday there were reasons to be “cautiously

optimistic” about a renewal.

With the extension priced in by investors to some extent, attention may turn

to other unresolved issues including fertilizer exports.

Ukraine has been seeking a one-year extension and the inclusion of the major

port of Mykolaiv, while Russia has been striving to boost its grain and

fertilizer exports.

“It was in the interest of all the parties to reach an agreement,” Nathan

Cordier, analyst with consultant Agritel, said.

“A renewal was largely priced in by the market, but there are still

negotiations taking place on questions like the one-year extension.”

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Euronext December wheat fell in early trade to a new 2-1/2-month low

of 314.75 euros a tonne, before paring losses to hold above the 315 euros chart

support level.

Prices at 0957 GMT

Last Change Pct End Ytd Pct

Move 2021 Move

CBOT wheat 795.50 -22.00 -2.69 770.75 3.21

CBOT corn 656.25 -9.00 -1.35 593.25 10.62

CBOT soy 1418.75 -10.50 -0.73 1339.25 5.94

Paris wheat 315.75 -4.00 -1.25 276.75 14.09

Paris maize 302.75 -4.75 -1.54 226.00 33.96

Paris rape 610.50 -5.75 -0.93 754.00 -19.03

WTI crude oil 84.99 -0.60 -0.70 75.21 13.00

Euro/dlr 1.04 0.00 -0.35 1.1368 -8.90

Most active contracts – Wheat, corn and soy US cents/bushel, Paris

futures in euros per tonne

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by

Rashmi Aich, Sherry Jacob-Phillips and Vinay Dwivedi)

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