Russia said it would limit military activity near the cities of Kyiv and Chernihiv. The withdrawal of Russia’s month-long invasion could ease some of the disruptions in world grain markets caused by the war.
Have they dropped too much?
Wheat futures contracts fell as much as 8% to $9.72 a bushel, falling below $10 for the first time since the start of the month. Later, wheat erased some of these losses and closed the trading session at USD 10.1425 per bushel. Corn extended its decline, falling as much as 4.7% to $7.1350 per bushel, a four-week low, before settling at $7.2625.
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The declines could offer some relief for global food inflation, which is accelerating at a breakneck pace. Still, futures remain at historically high levels and analysts warned that the announcement may not be a quick fix for exports. Ukrainian ports have been closed since the outbreak of war in late February, hampering maritime trade.
Terry Reilly, chief commodities analyst at Futures International LLC in Chicago, sees one problem. Although peace talks are ongoing, there are still a number of hurdles to overcome for Black Sea exports to start improving. That includes the lifting of sanctions on Russia and the resumption of shipping from Ukraine.
Important data is expected on Thursday
Traders are also awaiting key U.S. reports due Thursday that include details on spring planting intentions and quarterly grain stocks. The data will provide the first indication of how farmers are responding to rising input costs as well as growing demand for alternative crops in the wake of the war in Europe.