Aug. 28 (Bloomberg) -- Wheat rose to the highest in eight weeks in Chicago amid concerns that supplies from the Black Sea region will be disrupted as tension escalated between Ukraine and Russia.
Ukrainian President Petro Poroshenko called an emergency security meeting to defend against what he called a “de facto” Russian incursion. Ukraine and Russia will account for 21 percent of global exports, the U.S. Department of Agriculture said Aug. 12. Speculators cut bets on lower prices for three straight weeks.
“It’s all a guessing game at this point,” Matt Ammermann, a commodity risk manager from INTL FCStone, said by telephone today from St. Louis Park, Minnesota. “With conflicting headlines, it creates fear in the market, and the funds are short, so you’ll see buying.”
Wheat futures for December delivery rose 1.7 percent to close at $5.7175 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $5.7925, the highest since July 3. The grain is heading for the first monthly increase since April.
Yesterday, the most-active contract closed above both the 20-day and 50-day moving averages.
“We are putting a risk premium into prices for a potential disruption of supply from the Black Sea, and in doing so, we ran through multiple chart points to the upside causing technical buying,” Charlie Sernatinger, global head of grain futures for ED&F Man Capital Markets Ltd. in Chicago, said in an e-mail.
Prices has fallen 5.5 percent this year on the outlook for rising world inventories. Russia’s harvest of grains and pulses this year may be the biggest since the breakup of the Soviet Union, the country’s Grain Union said yesterday.
Corn futures for December delivery gained 1.2 percent to $3.6925 a bushel on the CBOT, the biggest gain since Aug. 11. Soybean futures for delivery in November increased 0.5 percent to $10.2875 a bushel, capping the first gain in four sessions.
--With assistance from Phoebe Sedgman in Melbourne.