Wheat contracts rise due to drought in Argentina

Wheat prices in Chicago rose during trading on Tuesday due to concerns about drought affecting crops in Australia and Argentina, the main exporters in the southern hemisphere, but gains were limited by large Russian export shipments.‏
Corn and soybean prices have fallen as good harvest weather continues in the United States and wheat production in Australia may decline after hot and dry weather. Argentina’s sales of the upcoming wheat crop are the slowest in seven years, delayed by farmers waiting for rains and next month’s presidential election.‏
“Wheat is still facing downward pressure from huge export supplies from Russia despite the low harvest in Australia and Argentina,”said Matt Ammerman, director of commodity risk at StoneX.‏
“The markets are also tired of the news of the war in Ukraine and hardly react to reports about attacks on Ukrainian port facilities.”‏
The first large ship carrying grain sailed from a Ukrainian Black Sea port since Moscow withdrew from an agreement in July to allow exports, as a Russian air strike on the Ukrainian region of Odessa caused “significant damage” to port infrastructure and the destruction of some grain storage facilities.
“The news about the sailing of grain ships from Ukraine is being monitored again despite the lack of safety guarantees from Russia,” Ammerman said. Ukraine’s farmers and grain network are operating remarkably normally despite the war. The question is whether some shipowners decide to ignore the risks of war and sail to Ukraine, as well as how many others will follow them.‏
The markets are awaiting stock estimates by the US Department of Agriculture on Friday and are watching the weather as the US harvest continues.‏