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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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