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Wheat and corn swing with hazy outlook for Ukraine crops

A farmer harvests wheat near Reardan on Aug. 22, 2018. U.S. grain futures fluctuated this week between gains and losses as traders sought clarity on the situation in war-ravaged Ukraine. (Tyler Tjomsland/The Spokesman-Review)
By Kim Chipman </p><p>and Megan Durisin Bloomberg

U.S. grain futures fluctuated between gains and losses as traders sought clarity on the situation in war-ravaged Ukraine, capping off a wildly volatile week with more uncertainty.

Hard red winter “Kansas City” wheat used to make bread flour saw the biggest moves as of midmorning in Chicago, swinging almost 70 cents. The futures are currently on track for a weekly drop of 9%, which would be the steepest decline since last May.

U.S. President Joe Biden called for an end of normal trade relations with Moscow. Russia’s attack on Ukraine is putting at risk more than a quarter of the world’s supply of wheat, a fifth of corn and the bulk of sunflower oil. Chicago benchmark wheat on Tuesday soared to the highest ever. The futures have pulled back amid questions on whether the trade disruption will translate into higher demand for U.S. crops.

“Even with surplus available wheat supplies for export, high prices and freight costs are not likely to make U.S. wheat an attractive alternative for Black Sea buyers,” Jacqueline Holland, an analyst at Farm Futures, said in a blog post.

Weekly U.S. wheat export sales came in below the average in a Bloomberg survey. The country’s supply remains uncompetitive versus other origins like France, consultant Agritel said in a note.

Chicago wheat used to make cookies and cakes rose as much as 3.6% to $11.2625 a bushel after earlier falling as much as 4%. The futures for May delivery are poised for a weekly decline of 8%, the steepest drop since August 2016.

Corn rose as much as 1.2% to $7.645 a bushel after an earlier dropping by 1.6%. The U.S. reported net corn export sales of 2.2 million tons in the week to March 3, topping analyst expectations, government data showed Thursday. In other crops, soybeans fell after rising as much as 1.8% on Thursday amid Brazil crop worries.

Meanwhile, record-high global food costs could surge another 22% as Russia’s assault on Ukraine stifles trade and slashes future harvests, the United Nations warned on Friday.