Wheat Climbs as Ukraine Tensions Boost Supply Disruption Concern

Apr 14, 2014 3:04 pm ET

April 14 (Bloomberg) -- Wheat rose the most in three weeks on speculation that supply from the Black Sea region will be disrupted after clashes intensified in Ukraine. Corn and soybeans also gained.

European Union officials said they’re considering a third round of sanctions against Russia, the fifth-biggest wheat exporter, as at least one serviceman died and armed separatists in eastern Ukraine ignored a deadline to free official buildings they’ve occupied. Ukraine is the sixth-largest shipper. Russia, the U.S. and the European Union are scheduled to hold talks on the crisis on April 17 in Geneva.

“Escalating violence in eastern Ukraine is lifting grain prices today, with wheat the leader,” Dale Durchholz, the senior grain analyst for AgriVisor LLC in Bloomington, Illinois, said in a telephone interview. “Uncertainty about Russia’s next move encouraged speculative buying.”

Wheat futures for July delivery rose 2.8 percent to close at $6.8675 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest increase since March 24. Prices earlier touched $6.9725, the highest for a most-active contract since April 1. Trading volume today was 42 percent higher than the average the past 100 days, according to data compiled by Bloomberg.

Combined wheat exports from Russia and Ukraine are pegged at 27 million tons for the 2013-14 season, set to account for about 17 percent of global shipments this year, USDA data show. Ukraine is the third-biggest exporter of corn.

In the U.S., the largest wheat exporter, growing areas in the Great Plains had as little as 25 percent of the normal amount of rain in the past month, National Weather Service data show. Warm temperatures the past three days increased stress on crops that missed weekend rain, World Weather Inc. said in a report. Sub-freezing temperatures tonight may damage plant development in most areas, the private forecaster said.

Corn futures for July delivery rose 0.9 percent to $5.0925 a bushel in Chicago as wet weather from Arkansas to Ohio delays planting of the biggest U.S. crop.

Soybean futures for delivery in July advanced 1.1 percent to $14.635 a bushel on the CBOT.

--With assistance from Whitney McFerron in London and Phoebe Sedgman in Melbourne.