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Wheat, corn surge 4% amid concerns over Ukraine supplies

Published 03/03/2014, 06:08 AM
Wheat soars more than 4% amid concerns over Ukraine supplies

Investing.com - U.S. wheat and corn futures soared on Monday, as growing concerns over a disruption to supplies from Ukraine lifted prices.

The U.S. Department of Agriculture expects Ukraine to be the fifth-biggest wheat exporter and the third-largest shipper of corn in the current marketing year.

A disruption to supplies from Ukraine could mean increased demand for U.S. grains.

On the Chicago Mercantile Exchange, wheat for May delivery rose to a session high of $6.3788 a bushel, the most since December 12. Prices of the grain last traded at $6.3138 a bushel during U.S. morning hours, up 4.8%.

The May wheat contract rallied 2.21% on Friday to settle at $6.0220 a bushel.

The USDA projected that Russia and Ukraine will produce a combined 74 million tonnes of wheat in the 2013-14 marketing season and export a total of 26.5 million tonnes of the grain, representing 17% of world trade.

According to the USDA, Ukraine is forecast to export 10 million tonnes of wheat in the current season, while Russian wheat shipments are expected to total 16.5 million tonnes.

Meanwhile, corn futures for May delivery jumped to a daily high of $4.8263 a bushel, the strongest level since September 3, before trimming gains to trade at $4.8238 a bushel, up 4.1%.

The May corn contract climbed 1.98% on Friday to settle at $4.6340 a bushel.

Ukraine is forecast to export 18.5 million tonnes of corn in the current marketing season, representing 16% of global trade, according to the USDA.

Elsewhere on the CBOT, soybeans futures for May delivery rallied 1.6% to trade at $14.3675 a bushel. The May contract hit a six-month high of $14.4540 a bushel on February 27.

Prices of the oilseed have been well-supported in recent sessions as hot and dry conditions in key soy-growing regions in Brazil and Argentina fuelled concerns over crop prospects.

The South American counties are major soybean exporters and compete with the U.S. for business on the global market. Crop losses in Brazil and Argentina could mean increased demand for U.S. supplies.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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