American cereals: Wheat soars on new data, the decision to annex Russia

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Chicago | Reuters — Chicago wheat soared on Friday, buoyed by a drastic cut in U.S. production estimates by the Department of Agriculture, and Russia’s annexation of parts of Ukraine followed by increased sanctions Americans.

Corn climbed on smaller-than-expected U.S. stocks, while soybeans sank after the USDA noted an increase in oilseed stocks.

The most active wheat contract on the Chicago Board of Trade (CBOT) rose 25-1/4 cents, to $9.21-1/2 a bushel, after hitting $9.45-3/4 a bushel , its highest since July 11 (all figures US DOLLARS$). For the week, the contract gained 4.66%, its biggest weekly gain since Sept. 9.

CBOT corn firmed eight cents to $6.77-1/2 a bushel after climbing to $6.96-1/4, its highest since Sept. 21.

Soybeans fell 46 cents to $13.64-3/4 a bushel, their lowest since August 4, posting a weekly decline of 4.28%, their biggest since the week ended June 24 .

The 2022 U.S. wheat crop was lower than previous forecasts, the USDA said in its annual Small Grains Report, reducing its assessment of the U.S. wheat crop to 1.65 billion bushels. . That compares to analysts’ average estimate of 1.778 billion bushels in a Reuters poll and 1.783 billion bushels in the USDA’s August estimate.

“I see ending stocks (of U.S. wheat) falling below that 500 million bushel level and tightening, especially for our quality milling wheat,” said Arlan Suderman, chief commodity economist for StoneX.

Corn also found support from tighter than expected inventories, with the USDA pegging corn inventories at 1.377 billion bushels, down from trade expectations of 1.512 billion bushels.

“We chewed a lot more corn in the livestock business, because of the drought,” said Mike Zuzolo, president of Global Commodity Analytics.

Soybean futures fell after the agency raised its inventory valuation to 273.76 million bushels, well above the average trade estimate of 242 million bushels.

Heightened tensions between Russia and Ukraine supported wheat and corn futures. Russian President Vladimir Putin proclaimed the annexation of part of Ukraine during a ceremony at the Kremlin on Friday after holding what Russia called referendums in occupied areas. Western and Kyiv governments said the votes violated international law and were coercive and unrepresentative.

Tensions have also been heightened by a leak of Russian gas pipelines to Europe, raising doubts about the sustainability of a United Nations-supervised transportation corridor for Ukrainian grain.

– Reporting for Reuters by Christopher Walljasper in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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