Chicago wheat fell on Monday as dealers assessed positive signals from talks between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy to end the war in Ukraine, while abundant global supplies also depressed prices.

An end to the war in Ukraine would be bearish for wheat markets as a possible removal of war risk insurance for shipping would make exports cheaper, while more Ukrainian ports could be available for wheat shipments.

Positive harvest prospects in South America weakened soybeans and corn in quiet trade, with many dealers still on holiday.

The Chicago Board of Trade’s most active wheat contract fell 0.7% to $5.15-1/4 a bushel at 1258 GMT. Soybeans fell 0.6% to $10.65-1/4 a bushel, corn fell 0.6% to $4.47 a bushel.

“Geopolitical risks continue to brew amid the increased efforts to find peace between Ukraine and Russia,” said Matt Ammermann, commodity risk manager at StoneX. “But Russia continues its daily attacks via drones/missiles, making peace feel like something that is rather distant if not attainable at all. Russian wheat still remains below $230 as it continues to compete for sales against the cheapest origin Argentina.”

“Global wheat supplies are good, overall there is little weather risk in the northern hemisphere.”

Trading remained light after the Christmas holiday, and as year-end approached, many traders booked profits and exited the market. A lack of fresh news in corn and soybeans has also given dealers little incentive to trade.

A bumper soybean harvest from top exporter Brazil added to the bearish mood.

“The weather in South America looks favourable, so production is unlikely to suffer major losses. This will limit the upside potential for international soybean prices,” said Johnny Xiang, of Beijing-based AgRadar Consulting.

Soybeans and corn lacked overall direction, Ammermann said.

“South American weather is fully beneficial in soybean regions,” Ammermann said. “There is still no signed agreement between the U.S. and China on Chinese soybean purchases.”

“Good South American wheat and soybean crops also raise expectations of large South American corn harvests.”
Source: Reuters