Grain futures mixed, wheat falls after soaring the most since 2012 as Russia concludes military drills

Grain futures were mixed on Tuesday, wheat fell after soaring the most since June 2012, following the announcement Russian President Vladimir Putin had ordered troops to return to their bases after military exercises concluded amid rising tensions in the pro-Russian Ukraine’s Crimea region. Meanwhile, corn and soybeans advanced.

On the Chicago Board of Trade, wheat futures for settlement in May lost 0.2% to trade at $6.2938 per bushel by 15:41 GMT. Prices touched a session high of $6.3200 per bushel, while day’s bottom was touched at $6.2112 a bushel. The grain retreated after advancing 5.7% yesterday, the biggest daily increase in more than 1-1/2 years.

Wheat settled 8.2% up in February, after plunging 8.3% in January and 9.5% in December, on expectations for a record global output of 712.7 million tons.

According to data by the International Grains Council (IGC), Ukraine will be the sixth-largest global wheat exporter, as it is forecast to ship 9.5 million metric tons of the grain in the 2013-14 season through June, up from 7.1 million tons a year ago.

Wheat prices were pressured following a report that revealed Russian President Vladimir Putin ordered troops to return to their bases, after military exercises near Leningrad finished.

Today the US Secretary of State is expected to visit Kiev. His visit comes after the leaders of G-7 nations said Russian actions are seen as clear violation of Ukraine’s territorial integrity, while at the same time the Russian Federation told the United Nations its intervention in Crimea region is legal.

“With Russia recalling their troops, it reduces the risk of escalating tensions between Ukraine and Russia,” Vanessa Tan, an analyst at Phillip Futures Pte in Singapore, said in a Bloomberg interview. “This eased concerns that the unrest would disrupt grains exports in the Black Sea region.”

DTN’s March 4th forecast called for extreme cold over the Midwest early this week, before temperatures moderate somewhat later in the week. However, temperatures are not seen cold enough to harm the dormant winter wheat in the region.

Meanwhile, a milder trend is expected across the Southern Plains over the next few days. There is slight likelihood of precipitation later in the week, with some chances of increasing moisture during the 6-to-10 day period, but forecasts are still quite sloppy.

Elsewhere on the grains market, soybeans futures for settlement in May, added 0.88% to trade at $14.2238 per bushel by 16:00 GMT. Futures touched a session high at $14.2263 per bushel, while day’s low was hit at $14.0462 per bushel. On February 27, prices touched $14.4375 per bushel, the strongest since July 24th. The grain settled last week 2.5% higher, after adding 0.5% in the previous 5-day period. However, the oilseed has lost 8.5% in 2013.

Corn up as well

On the Chicago Board of Trade, corn futures for May delivery rose by 0.66% to trade at $4.7312 a bushel by 16:00 GMT. Futures hit a session high at $4.7362 per bushel, while day’s low was touched at $4.6538 per bushel. Yesterday, prices touched $4.8262 per bushel, the strongest since September 3. Corn has advanced 8.5% this year after it lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.

DTN.com reported on March 4th that recent heavy rains in the Brazilian top soybeans-producing region, Mato Grosso, have resulted in some harvest losses. Additional heavy rainfall is expected this week, which raises further concerns over the final harvest total. According to Mato Grosso Agriculture Economics Institute estimates, cited by DTN.com, nearly 500 000 metric tons of soybeans have been lost due to wet-weather conditions.

Meanwhile, the website reported that condition in central Argentina will continue to be mostly favorable for filling and maturing corn and soybeans this week.