Wheat rose to the highest in more than a year as violence in Ukraine spread to the country’s main grain-export port of Odessa, increasing concerns of supply disruption, and after drought and freezing weather damaged the U.S. crop.
Ukraine troops are in heavy fighting in Slovyansk in the country’s east, while clashes in Odessa yesterday left two people injured, Interfax reported. Odessa and four other Black Sea ports handle 87 percent of Ukrainian grain exports, Morgan Stanley said in March.
“The markets should have a firm start to the week as a result of the worsening situation in Ukraine and continuing dry conditions for the large wheat production areas in the U.S.,” Paris-based farm adviser Agritel wrote in a comment.
July-delivery wheat rose 1.6 percent to $7.275 a bushel on the Chicago Board of Trade by 4:38 a.m. local time after earlier touching $7.405, the highest since May 9 last year. Milling wheat for November traded on Euronext in the French capital rose 1.1 percent to 208.25 euros ($288.97) a metric ton.
U.S. farmers probably will harvest the smallest winter-wheat crop since 2006 after freezes damaged yields and drought conditions persisted for the fourth straight year in the Great Plains, according to a survey of 20 analysts and traders by Bloomberg News.
The U.S. is the biggest wheat exporter, while Russia and Ukraine are expected to rank fifth and sixth in the 2013-14 season, according to the International Grains Council.
Ukraine grain exports have dropped since the middle of April, Agritel wrote. Corn shipments were less than 200,000 tons in the past seven days, while wheat shipments “remained large” with 175,000 tons exported, it said.
“The fact that the violence has increased has, from a market point of view, really got people concerned about what happens with infrastructure in Ukraine,” Michael Pitts, commodity sales director at National Australia Bank Ltd., said by phone from Sydney today.
July-delivery corn rose 0.3 percent to $5.0075 a bushel in Chicago. Soybeans were little changed at $14.705 a bushel.