GRAINS: Wheat futures fall a day after Ukraine crash price spike

Reuters — U.S. wheat futures fell 3.4 per cent on Friday, erasing gains posted a day earlier following the downing of a Malaysian commercial airliner over eastern Ukraine, while Chicago Board of Trade corn futures also declined and soybeans were mostly lower.

Investors were worried an escalation of the conflict between Ukraine and Russia, both major wheat producers, could affect grain shipments, but those concerns subsided on Friday after Russian President Vladimir Putin called for a ceasefire in eastern Ukraine, where Moscow-backed separatists are fighting.

“Wheat traders … are treating this as a micro event, and they don’t expect it to disrupt any Black Sea wheat exports,” said Robert Bresnahan, president of Trilateral Inc.

CBOT corn and wheat both notched four-year lows in the last week, pressured by expectations of rising global inventories.

CBOT September wheat settled down 18-1/2 cents at $5.32-1/4 per bushel. September corn ended down 8-1/4 cents at $3.71-1/4 a bushel. August soybeans ended up 2 cents at $11.76-3/4 a bushel while most-active November fell 8-3/4 cents at $10.85-1/4.

Wheat faced additional pressure from rising yields as the U.S. hard red winter wheat harvest moves into the central Plains and away from drought-hit areas farther south.

As well, a spell of warm, dry weather in Europe this week should allow harvesting to accelerate in France, a major exporter.

Corn fell on near-ideal crop weather in the U.S. Midwest that is bolstering expectations for a big harvest this autumn.

“The recent cool weather has been very favorable for the pollinating corn crop across the Midwest. While some warmer weather is still expected next week, the forecast has trended a bit cooler today and heat stress is not expected,” MDA Weather Services said in a daily note to clients.

Mild weather also pressured soybeans, especially new-crop November, even though the USDA this week confirmed several sales of new-crop U.S. soybeans to China and unknown destinations.

“It’s really a lukewarm response to some positive news this week. We’ve sold 1.5 million tonnes of new-crop beans, and the market did not seem terribly overwhelmed,” said Jack Scoville, a vice president with the Price Futures Group.

For the week, spot wheat gained 3.4 per cent, its biggest rise since April as the marketed rebounded from four-year lows. Spot corn fell for a fourth straight week, dropping 7.1 per cent, and spot soybeans tumbled 9.3 per cent.

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