By Kirk Maltais
--Wheat for May delivery fell 1.7% to $7.62 3/4 a bushel on the Chicago Board of Trade Tuesday with traders unfazed by Russia's moves ahead of the re-negotiation of the Black Sea export deal and the anniversary of the start of the war in Ukraine.
--Corn for March delivery rose 0.4% to $6.80 1/2 a bushel.
--Soybeans for March delivery rose 1.4% to $15.30 a bushel.
HIGHLIGHTS
Shrugging Off Threats: Traders were seemingly unfazed by Russian President Vladimir Putin's declaration that his country would step back from the New START treaty, which limits nuclear arms between the U.S. and Russia, and that was supposed to last through 2026. Although traders are bracing for a surprise out of the Black Sea that could move prices this week, Mr. Putin's latest declaration did little to affect wheat Tuesday. Instead, traders are focusing on fundamentals, said Charlie Sernatinger of Marex. "Putin's words are simply not bearish to the wheat," said Mr. Sernatinger. "What is bearish is two fold; the seasonals, and the fact that U.S. production and stocks will likely rise for the first time in seven seasons."
Keeping Insulated: Traders were able to brush off other issues that could potentially play a role on the flow of wheat out of the Black Sea - stemming from Russia's reluctance to renew the UN-brokered export deal with Ukraine around the anniversary of the start of the war. Export flows for Russia's ample wheat crop are expected to take up any room left behind by missing Ukrainian shipments, Commerzbank said in a note. "Russian grains exports have reached almost record levels in recent months, partly due to a record wheat crop, which explains why wheat prices have so far shown only a muted response to the risk of lower supply from Ukraine," said the firm.
Quick Freeze: A frost event over the weekend in Argentina supported higher soybean futures Tuesday. Temperatures registered at freezing in some areas, although most areas were spared. "We likely saw some significant cosmetic damage from the light frost, with more significant yield loss likely more isolated," said Arlan Suderman of StoneX in a note. Mr. Suderman adds that heavy rains also reached Brazilian growing areas, which could potentially impact harvesting there.
INSIGHT
Stacked Schedule: Grain traders entered this week with a full schedule. The Federal Reserve will release minutes from its latest FOMC meeting Wednesday, which traders across all markets are watching for commentary and signals for future moves. On Thursday, the USDA will commence its annual agricultural outlook forum, which will provide the agency's first projections for the 2023/24 crop.
Taking a Piece: Although the effect is growing slowly, higher interest rates appear to be a source of pressure for farm incomes this year, said the Federal Reserve Bank of Kansas City in a report released Friday. Higher interest rates are being applied to farm loans, and are expected to be a factor weighing on commodity prices. "Elevated prices for most major commodities continued to support profit opportunities for many producers, but higher expenses and adverse weather conditions remained key concerns," said the bank.
AHEAD
-The USDA will begin its Agricultural Outlook Forum at 8 a.m. ET Thursday.
-Beyond Meat Inc. will release its fourth-quarter earnings report on Thursday.
-The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Thursday.
-The USDA will release its monthly Livestock Slaughter report at 3 p.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
02-21-23 1609ET
