MARKET DEVELOPMENT
GRAINS-Grains, soybeans rally on fear of Russia-Ukraine conflict, surging oil
GRAINS-Grains, soybeans rally on fear of Russia-Ukraine conflict, surging oil
22.02.2022 (www.agriculture.com) - * Wheat hits 3-month top, corn touches highest since June
* Putin's recognition of rebel Ukraine regions fuels war fears
* Soybeans rise amid energy rally, South American crop worries (Rewrites, adds quote, updates prices, changes byline, changes dateline from PARIS/SINGAPORE)
By Karl Plume
CHICAGO, Feb 22 (Reuters) - U.S. wheat futures jumped to a near three-month top on Tuesday and corn rallied to its highest since June on worries that Russia's recognition of two breakaway regions in eastern Ukraine could trigger conflict that could disrupt Black Sea grain flows.
Soybeans rose for a fourth consecutive session and came within a penny per bushel of a nine-month peak as soaring energy markets lifted soybean oil futures by nearly 3%. Continuing concern about a South American soy crop shortfall due to poor weather added support.
"This is a supply-led market and the supplies are trapped whether it's because of Russia-Ukraine or because of the drought," said Mike Zuzolo, president of Global Commodity Analytics. "The market's trying to ration demand."
Chicago Board of Trade March wheat surged 26 cents to $8.23 a bushel by 11:50 a.m. CST (1650 GMT) after peaking at the highest level for a most-active contract since Nov. 29.
CBOT March corn hit a contract high of $6.71-3/4 a bushel and was up 11-3/4 cents at $6.66. All other months also set contract highs.
March soybeans gained 22 cents to $16.23-1/2 a bushel after hitting a peak of $16.32 earlier in the day.
Grains markets have been particularly sensitive to developments in Moscow's standoff with the West over Ukraine, since Russia and Ukraine account for a significant portion of the world's wheat export supplies and a sizable share of corn shipments.
Traders are assessing the impact of fresh measures by the West to deter a further Russian incursion into Ukraine after Germany put the brakes on a new gas pipeline and Britain hit Russian banks with sanctions.
The market also continues to monitor weather in South American corn and soy production areas, as well as drought conditions in the U.S. Plains wheat belt where the winter crop is due to break dormancy. (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore Editing by Amy Caren Daniel and Mark Potter)
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