Chicago wheat futures reached a new three-year high on Friday as the market focused on military escalation along the Black Sea which threatens to put a squeeze on Russian and Ukrainian imports. Corn and soybeans reached 'new multi-year highs and lifetime contract highs. This was further supported by doubts about U.S. corn yields and a surge of Chinese demand for U.S. soy beans. The Chicago Board of Trade's most traded wheat contract finished 23-1/4 Cents higher, at $7.84 a bushel. It rose to $7.90-1/4 a bushel earlier, which was its highest level since Febuary 2023. This is also above previous highs of three years hit this week. The report that Russia is considering increasing missile strikes against Ukraine this week dimmed the hopes of a quick recovery in Black Sea shipments. In recent weeks, tit-fortat attacks brought grain loadings to a virtual stop at Russian and Ukrainian ports.

Jack Scoville is vice president at Price Futures Group. He said that Russia does not seem to be inclined to allow any kind of exports. The news that a vessel was sunk in the Black Sea off the coast Romania late Thursday night, probably after being hit, brought attention to the war risks for shipping in this area, traders say. Officials said that the Ukrainian 2027 "planting campaign" is in danger because farmers might not have the money to plant crops due to Russia's blockade on sea ports, which has severely curtailed exports. Farmers and analysts in Russia expressed doubts on Thursday regarding measures to maintain grain imports. Some called for a reduction in the area of winter sowing to prevent a crash in domestic prices.

Some importers are turning towards countries in the European Union like Romania, France, and Poland. After setting a three-year record, CBOT corn settled at $5.36-12 a bushel up 3 cents. CBOT soybeans settled 20 cents higher, at $12.88 a bushel after hitting another peak of 2-1/2 years. Last week, a major U.S. Midwest?tour found?subpar crops due adverse summer weather. It was estimated that U.S. corn production in 2026 would fall far below government estimates. The Chinese demand for U.S. soybeans has boosted the price of soybeans. Sinograin, China's state-owned stockpiler of soybeans, held its fifth soybean auction in less than one month on Wednesday. The goal was to free up storage space for U.S. cargoes. A report that the U.S. was preparing to expand waivers of biofuel laws also helped support corn and soybean prices. The administration is planning to protect the agricultural sector from an anticipated expansion of waivers for biofuel laws. Biofuel is produced primarily from corn and soyoil. Reporting by Heather Schlitz, Chicago; Additional reporting from Gus Trompiz, Paris; Daphne Zhang, Lewis Jackson and Tasimzahid in Beijing; Editing and proofreading by Tasimzahid Matthew Lewis and Paul Simao

(source: Reuters)

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