CORN - Wheat rallies as Kremlin drone attack casts doubt on Black Sea grain deal

2023-05-03 19:02:18 ET

U.S. wheat futures surged from a 25-month low Wednesday on fresh tensions between Russia and Ukraine that could jeopardize the Black Sea grain deal.

Russia accused Ukraine of attacking the Kremlin with drones in a failed attempt to kill President Vladimir Putin, which analysts said led traders to cover their short positions in wheat.

Confirmation of the Federal Reserve's 25 basis point interest rate hike gave Chicago grain futures a late lift as the trading session neared a close.

CBOT wheat ( W_1:COM ) for July delivery settled +5% to $6.39 3/4 per bushel after earlier dropping to a session low $6.03 3/4, the lowest since April 2021, while corn ( C_1:COM ) for July delivery closed +1.5% to $5.88 1/2 per bushel and July soybeans ( S_1:COM ) ended +0.5% to $14.17 1/2 per bushel.

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

Wheat's big move was "a combo of being oversold, heavily short by the funds, the Russia Ukraine issue escalation, the tactic to negotiate the Black Sea and people coming out and saying the rains that happened in the Plains may not have helped the Kansas City wheat, that the damage is done," Daniels Trading's Craig Turner told Reuters.

More Seeking Alpha analysis:

• WEAT: Positive Catalysts Percolating, Wait For A Buy
• SOYB: Soybeans Are Steady And Higher Prices Could Be On The Horizon

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