U.S. soybean futures fell about 2% on Wednesday, dragged down by profit-taking in soybean oil futures and prospects for beneficial rains in Brazil, traders said.
Wheat and corn futures also fell, pressured by optimism about the extension of a Black Sea export deal and diminishing concerns that the war in Ukraine could escalate following a missile strike in Poland.
Soybean oil sometimes follows the trends of crude oil in its role as a feedstock for biodiesel. Crude fell more than a dollar on Wednesday as shipments of Russian oil via the Druzhba pipeline to Hungary resumed and rising COVID-19 cases in China weighed on sentiment.
Wheat and corn fell as traders watched developments in the Black Sea region. On Wednesday, a UN source said there were reasons to be “cautiously optimistic” about the renewal of the Black Sea grain corridor initiative, which is due to launch on Saturday unless there are objections.
The UN-backed deal allowed grain shipments from some Ukrainian ports to resume in late July, bringing about 10 million tons of shipments and helping to curb international prices.
“The market expects Ukrainian exports to continue as the deal is likely to be extended,” a Singapore-based trader said.
“The news from Poland, that made everyone go into shock”said Matt Wiegand, a commodity broker at FuturesOne, and assured that “That’s what got us from 1 to 2 cents up to 10 cents.”
Grain traders said they “were waiting for Russia to comment on reports of missiles hitting Poland, a NATO country, which could deteriorate the political climate in the region.” “I would wait for a volatile monitoring session until tomorrow, until everything is cleared up”Wiegand said.
Signs of progress in talks to expand an export deal for Ukrainian wartime crops had earlier pressured grain futures.
“We expect the corridor to ultimately get a makeover,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia but “Like most, we are wary of the kind of disturbing quibbles the President of Russia comes up with”.
Source: Ambito
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