U.S. wheat futures surged to a one-month high on Friday, driven by spring weather risks in the northern hemisphere and escalating tensions in the Black Sea region. Meanwhile, soybeans experienced gains, while corn prices declined as market participants assessed U.S. planting prospects amidst favorable rains in the Midwest and heightened export competition from South America.
Despite weekly declines in corn and soybean markets, wheat secured its third consecutive weekly gain. The wheat market was influenced by rumors of potential delays to Russian export shipments, alongside concerns about deteriorating French wheat conditions and drone attacks on Black Sea grain ports raising fears of shipping disruptions.
Geopolitical factors primarily fueled the rise in wheat prices, with Joe Davis, director of commodity sales at Futures International, highlighting the impact of ongoing tensions on market dynamics. Notably, the market remained resilient even in the face of a stronger dollar on Friday, typically making dollar-denominated commodities more expensive for holders of other currencies.
On the Chicago Board of Trade (CBOT), the May wheat contract (WK24) climbed 11 cents to $5.67-1/4 a bushel, reaching a peak of $5.74-3/4, the highest level since March 1.
In contrast, expectations of a more stringent preliminary climate model for the sustainable aviation fuel (SAF) subsidy program under the Biden administration contributed to bearish sentiment in the corn market.
Although rains in the Midwest bolstered soil moisture levels and temporarily delayed early field activities in certain regions, forecasters anticipate drier weather conducive to corn planting in the near future.
Looking ahead, there is optimism surrounding the commencement of corn planting next week, as highlighted by Mike Zuzolo, president of Global Commodity Analytics.
CBOT May soybeans (SK24) rose by 5 cents to $11.85 a bushel, while May corn (CK24) declined by 1 cent to $4.34-1/4 a bushel.