COM - Wheat falls as details of Ukraine grain deal renewal remain confused

2023-03-20 17:25:30 ET

U.S. wheat futures fell Monday, as the terms for the length of the Black Sea export agreement extension remain murky , with Russia saying the extension is only for 60 days and Ukraine claiming the deal is for the full 120 days.

Wheat futures in Chicago ( W_1:COM ) fell as much as 2% before settling -1.6% to $6.98 1/2 per bushel, while front-month May corn ( C_1:COM ) ended -0.2% to $6.33 1/2 per bushel and May soybeans ( S_1:COM ) pushed off three-month lows to close +0.5% to $14.85 per bushel.

ETFs: ( NYSEARCA: WEAT ), ( CORN ), ( SOYB ), ( DBA ), ( MOO )

The discrepancy on the length of the extension likely will add a risk premium , Rabobank agriculture analyst Dennis Voznesenski told Bloomberg.

A 60-day agreement would expire just before winter crop harvest in Ukraine, which could give Russia more bargaining ability "because the world will need the Ukrainian grain more from a seasonal perspective," Voznesenski said. "If it was 120 days, it covers the initial harvest period at least."

On top of geopolitical concerns, analysts said U.S. weather added to pressure on wheat futures , with precipitation likely at the end of this week after frost damage is expected early in the week.

Soybean futures gained on indications of improving export demand, with the U.S. Department of Agriculture confirming higher soybean inspections in its latest report.

There's "lots of volatility ahead" for wheat prices, Andrew Hecht writes in an analysis published on Seeking Alpha .

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