Grains have traded at near-record levels since Russia’s invasion of Ukraine upended trade routes, adding to rampant inflation of food and livestock feed. Weather woes, including drought in some parts of North America and flooding in others, have intensified worry about supply shortages. Traders are watching for signs of how conditions may look over the next few months as growing season begins.
Wheat in Chicago plunged the most allowed by the exchange on improved prospects for Ukraine grain shipments and US crop weather. Corn and soybeans also tumbled.
Russia discussed Black Sea exports with Turkey on Monday and said it is willing to help ensure Ukrainian exports, though the Kremlin provided no details and some analysts expressed doubts.
In the US, a June weather forecast looked favorable for much of the Farm Belt, and a report showed wheat planting progress ahead of expectations.
“We are not seeing confirmation yet of a threatening summer forecast,” Rich Nelson, chief strategist at commodity brokerage Allendale Inc., said in an email. Also, a 30-day weather outlook released by the US government Tuesday afternoon shows “no yield threat” to crops.
The US Department of Agriculture’s latest crop planting report also could weigh on prices. Corn seeding as of last week were 86% complete. Sowing of spring wheat, which has been severely delayed due to rains and cool temperatures in the northern Plains, exceeded expectations at 73%. That compares to 49% planted the prior week.
The improved prospects for world supplies sent most-active Chicago wheat futures down as much as 6.1% to their daily price limit of $10.875 a bushel, settling the day at the lowest level since May 4. The July contract tied to hard red winter wheat also fell by the exchange limit.
Corn fell 3.1% to settle at $7.535 a bushel, the lowest since April 7. Soybeans retreated 2.8%, the biggest drop since April 11, to end the month little changed at $16.8325 a bushel.
In soft commodities, sugar declined the most in three weeks in New York in the wake of oil prices, which declined following reports that OPEC members are considering exempting Russia from the group.