Chicago | Reuters –– U.S. grain futures dropped on Monday in profit-taking after concerns eased about political upheaval in Ukraine affecting grain shipments.
Wheat pulled back after the May contract on Friday rose two per cent over Ukraine, the world’s third largest corn exporter and a major wheat exporter.
Crimeans voted overwhelmingly to break away from Ukraine and join Russia in a referendum on Sunday that alarmed the former Soviet republic.
“An absence of fresh unrest in the Black Sea Region has the marketplace thinking that perhaps we got a bit too excited about Crimea,” said Kayla Burkhart, broker for SunPrairie Grain.
“Grain markets have started ‘selling the fact’ after ‘buying the rumour’ last week on thoughts prices would be higher after the vote,” she said.
Chicago Board of Trade May wheat fell 12-3/4 cents to $6.74-1/2 a bushel (all figures US$). May corn slid seven cents to $4.79 a bushel.
Ukraine could lose about 11 million tonnes of grain in the 2014 harvest due to a sharp decrease in sowing area caused by a shortage of money, analyst UCAB said on Monday. Up to 20 per cent of Ukrainian arable land might not be sown this year, mainly because of “the absence of any financing in connection with the difficult economic and political situation.”
Port activity has continued normally, however, and farmers have started spring sowings, analysts said.
“Tensions in the Ukraine are easing for the moment at least,” said Sterling Smith, futures specialist for Citi. “Expect weakness as long as there are no issues from the Crimea.”
Private exporters reported the sale of 107,400 tonnes of U.S. corn to Mexico for delivery in the marketing year that ends on Aug. 31, according to the U.S. Department of Agriculture. They struck deals to sell 110,000 tonnes of U.S. soymeal to unknown destinations for delivery in the marketing year that starts on Oct. 1.
On Tuesday, traders will wait for the results of a wheat tender from Egypt’s main wheat-buying agency, the General Authority for Supply Commodities.
May soybeans rose 3-1/4 cents to $13.91-3/4 a bushel in a rebound from recent losses and amid some concerns about a grounded ship temporarily slowing soy exports from Argentina, traders said.
A soybean cargo ship that ran aground nine days ago in Argentina’s main grains hub of Rosario has slowed exports longer than expected while port workers threaten to go on strike later this month if hefty wage demands are not met.
“A small collection of minor items kept the soybeans from slipping back into negative territory,” Smith said.
Still, the May futures contract has a “heavy look,” he said. “For the moment lower looks to be the path of least resistance.”
The National Oilseed Processors Association on Monday said its U.S. members crushed 141.612 million bushels of soybeans in February, down from 156.943 million in January. Analysts had forecast a monthly crush of 140.9 million bushels, according to a Reuters poll.
A bumper Brazilian harvest and weaker demand from China have weighed on prices recently, along with bearish market talk the United States was making unusual imports of Brazilian soybeans.
Chinese soybean importers canceled up to 600,000 tonnes of South American soybean cargoes for shipment between March and May as an outbreak of bird flu in the country and negative crush margins curb demand.
— Tom Polansek reports on agriculture and ag futures markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Colin Packham in Sydney.