Grain futures lose ground, corn retreats as concern over Ukraine exports eases

Grain futures lost ground on Wednesday, corn eased off from a six-month high as concern eased that tension between Ukraine and the Russian Federation may result in disruption of exports from the Black Sea region.

On the Chicago Board of Trade, corn futures for May delivery fell by 0.21% to trade at $4.8238 a bushel by 14:32 GMT. Futures hit a session high at $4.8488 per bushel, the strongest since September 3, while day’s low was touched at $4.8062 per bushel. Corn has advanced 14% this year after it lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.

Yesterday, Russian President Vladimir Putin, in his first public remarks, after Ukraine announced the region of Crimea had been seized by Russian forces, said while he kept the right to use military forces to defend ethnic Russians, there was no immediate necessity to do so at the moment.

According to data by the International Grains Council (IGC), Ukraine will be the third-largest global corn exporter after Brazil and the US, as it is forecast to ship 18.3 million metric tons of the grain in the 2013-14 season through June, up from 13.6 million tons a year ago.

“Easing concerns over export disruption in Black Sea region is weighing on prices,” Vanessa Tan, an analyst at Phillip Futures Pte., said in a Bloomberg phone interview from Singapore today.

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 conditions in central Argentina will continue to be mostly favorable for filling and maturing corn and soybeans this week.

Elsewhere on the grains market, soybeans futures for settlement in May, lost 0.54% to trade at $14.1588 per bushel by 14:34 GMT. Futures touched a session high at $14.2638 per bushel, while day’s low was hit at $14.1962 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.

Wheat down as well

On the Chicago Board of Trade, wheat futures for settlement in May lost 0.87% to trade at $6.3762 per bushel by 14:34 GMT. Prices touched a session high of $6.4388 per bushel, while day’s bottom was touched at $6.3612 a bushel. Yesterday prices touched $6.4462, the strongest since December 10.

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.

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.