Wheat Prices Fall After Easing Tensions in Russia-Ukraine

Wheat fell to the lowest in almost three weeks in Chicago and corn declined amid speculation that tension between Ukraine and Russia will ease, improving the prospects for the Black Sea region’s grain exports.

Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko largely agreed on steps toward easing the conflict in Ukraine, Putin’s spokesman said, denying Ukraine’s assertion that the leaders reached agreement on a truce. The two countries account for about 21 percent of world wheat exports, U.S. Department of Agriculture data show, and grain shipments have continued from the region even amid unrest.

“We’ve just got to wait and see how things develop,” Dave Norris, an independent grain broker in Harrogate, England, said by phone. “The markets certainly seem to think it’s bearish news” that the countries may reach an agreement, he said.

Wheat for delivery in December fell 1.4 percent to $5.4725 a bushel at 7:52 a.m. on the Chicago Board of Trade. Earlier the price touched $5.4475, the lowest since Aug. 14. In Paris, milling wheat for November delivery dropped 0.4 percent to 172.75 euros ($227.16) a metric ton on Euronext.

Corn for December delivery fell 0.8 percent to $3.6075 a bushel in Chicago, after touching $3.59, the lowest since Aug. 12 when it reached a four-year low of $3.58 a bushel. Soybeans for November delivery declined 0.6 percent to $10.26 a bushel.

Unrest in Ukraine has roiled grain markets in recent weeks even amid prospects for bumper global harvests. Ukraine, the U.S. and Europe accuse Russia of dispatching soldiers and backing pro-Russian rebels in fighting. Russia, which is facing further sanctions as early as this week over the unrest, has repeatedly denied involvement.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza