Wheat rises on more potential Russia sanctions, poor U.S. crop conditions

Road through wheat field

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Wheat futures in Chicago rebounded Tuesday from the lowest close in a month on Friday, as accusations of war crimes perpetrated by Russia in Ukraine are leading to fresh sanction proposals which helped lift U.S. grains and other commodities.

Continued stress on exports coming out of the Black Sea is providing support for grains, particularly wheat (W_1:COM), which led the CBOT with a +3.5% gain to $10.45 1/4 per bushel for the May contract; soybeans for May delivery (S_1:COM) settled +1.8% to $16.31 a bushel, and May corn (C_1:COM) closed +1.2% to $7.59 3/4 a bushel.


"Ports are closed in Ukraine and Russian shippers and exporters are not offering in part due to sanctions but mostly due to the war and the chance to lose ships," Jack Scoville of Price Futures Group said, Dow Jones reported.

Worse than expected U.S. crop conditions added to global supply concerns, as the U.S. Department of Agriculture reported winter wheat is in 30% good-or-excellent condition, a record low and well below the 53% reading at the same time last year.

"U.S. hard red wheat ratings are the lowest on record and point to a 10%-20% fall in U.S. hard red wheat yields vs. trend depending on April/May weather conditions," which will cause grain traders to focus on weather forecasts for wheat-growing Plains areas in the coming weeks, according to AgResource.

Global demand for grains should remain robust given supply tensions created by the war between Russia and Ukraine, two of the world's biggest grain exporters.

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