Grain futures mixed, corn extends drop from six-month high as Ukraine supply concern eases

Grain futures were mixed on Monday, corn extended a decline from the strongest level since August, after concern eased that tension between Ukraine and the Russian Federation may result in disruption of shipments from Ukraine, set to be the third-largest exporter. Meanwhile, soybeans also declined, while wheat extended gains.

On the Chicago Board of Trade, corn futures for May delivery fell by 0.43% to trade at $4.8613 a bushel by 15:29 GMT. Futures hit a session high at $4.8738 per bushel, while day’s low was touched at $4.7888 per bushel. On March 7th, corn futures touched $5.0238 per bushel, the strongest since August 27 and capped a 5.3% weekly gain, the biggest advance since the period ended May 31.

Corn has surged 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.

Corn advanced to the strongest level in six months after the escalating tension between Ukraine and the Russian Federation threatened to disrupt shipments from the Black Sea region. However, the 5 major ports, including Odessa, which account for almost 90% of Ukraine’s grain shipments are a long way from Crimean and exports won’t probably be disrupted, Morgan Stanley reported last week.

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.

On March 3rd, pro-Russian forces seized control of the southern Ukraine’s Crimea region in what turns out to be the worst conflict between the West and Russia since the Cold War era.

Few reports are “indicating that Ukrainian farmers are busily selling grain to address cash flow issues,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said today, cited by Bloomberg. He also added that market players are also keenly anticipating the monthly supply and demand report from the US Department of Agriculture due to be released later in the day.

Soybeans lose ground

Elsewhere on the grains market, soybeans futures for settlement in May, lost 1.16% to trade at $14.4063 per bushel by 15:27 GMT. Futures touched a session high at $14.5612 per bushel, while day’s low was hit at $14.3562 per bushel. On March 7th, prices touched $14.5962 per bushel, the strongest since July 24th. The grain settled last week 3.2% higher, after adding 3.1% in the previous 5-day period. However, the oilseed has lost 8.5% in 2013.

DTN.com reported on March 10th that soil moisture for second crop corn and late-filling early soybeans and corn in central Brazil is adequate to surplus at the moment. During the week, rainfall is expected to increase somewhat, favoring late-filling crops, but harming early harvests and early maturing crops.

Meanwhile, the website reported that conditions in central Argentina continue to be mostly favorable for filling and maturing corn and soybeans at this time. Scattered thundershowers are expected later this week, recharging soil moisture, but also being unfavorable for early-maturing crops.

Wheat extends advances

On the Chicago Board of Trade, wheat futures for settlement in May rose by 0.25% to trade at $6.5525 per bushel by 15:27 GMT. Prices touched a session high of $6.5575 per bushel, while day’s bottom was touched at $6.4362 a bushel. On Friday, wheat futures hit $6.6288 per bushel, the highest since December 3rd.

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.

DTN’s March 10th forecast called for mostly milder conditions over the Midwest during the next five days, followed by a return to colder than-normal conditions. Moisture is favorable to surplus in the east and somewhat drier in the west. According to the website there are no significant freezing weather threats for the soft red winter wheat crop at the moment.

Meanwhile, limited rainfall is expected across the dry Southwestern Plains growing areas during the next 10 days. Concern over crops started to increase as the spring is nearing and for now, there are no signs of improving amounts of rainfall. The website reported that the southeast areas may experience shower threats, which will help maintain beneficial conditions for wheat in these areas.