Wheat Prices Surge as US Peace Push in Black Sea Stalls

Chicago wheat futures surged on Tuesday, climbing 2.9% to $7.55-1/2 per bushel, as traders saw little hope for a swift resolution to the conflict disrupting Black Sea grain shipments. The rally came after a weekend of US diplomatic missions to Moscow and Kyiv failed to yield a breakthrough.

US envoys met with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy, but their efforts did not appear to pave the way for resuming Ukrainian and Russian grain exports. Tit-for-tat attacks on ports and shipping have brought Black Sea exports to a near standstill, forcing buyers to seek alternative suppliers.

Market participants remain wary of a prolonged interruption to grain flows from the region, which has kept a risk premium on wheat prices. Meanwhile, corn futures edged up 0.6% to $5.39-3/4 a bushel, supported by expectations of poor yields in the US Corn Belt. Soybeans rose 0.2% to $13.12-1/4 a bushel, underpinned by Chinese purchases and concerns over hot, dry weather in key US growing areas.

In broader markets, oil prices extended gains as Middle East tensions escalated after Iran threatened retaliation against any new US attacks, adding to worries about supply disruptions.