Chicago wheat futures rose 6% as India banned exports
Chicago wheat futures rose nearly 6% on Monday after India banned grain exports, a sudden policy change that raised concerns about global supply in the wake of Russia’s invasion of Ukraine.
India’s sanctions, triggered by a heatwave that has reduced crop prospects and boosted domestic prices, have hurt hopes of record wheat shipments from the country next year that will reduce war-reduced supplies from Ukraine.
Indian export bans also come as severe weather, droughts in the southern plains of the United States and parts of France are reducing production potential in other major exporting countries.
“The situation in the international market is getting more complicated, according to India’s decision on Saturday,” said consultant Agritel
The Chicago Board of Trade’s (CBOT) most active wheat contract rose to its 70-cent daily limit, or about 6%, to $ 12.47-1 / 2 a bushel, the highest level since March 9. It was up 5.3% at 0755 GMT.
Euronext wheat, the European benchmark that reached record highs last week near the record level set in March, is expected to rally in the opening trade after Monday.
There have been rumors of an export ban by India in recent days as the effects of the heatwave continue to grow, with many traders and analysts saying the wheat crop fell below 100 million tonnes compared to the official forecast of 105 million tonnes earlier this month.
Traders were assessing how much wheat would be shipped from India, despite the approval of existing export sales under credit letters and government-to-government agreements to meet food security demand.
Egypt said on Sunday it had agreed to buy half a million tonnes of wheat from India and that the purchase would be exempted from export bans.
The US Department of Agriculture (USDA) estimates that world stocks will decline to a six-year low in 2022/23, according to widely followed data last week.
In France, overnight storms brought some rain relief to the dry crop belt but the country’s main farm union said more regular rainfall was needed as food crops matured.
Traders will view weekly U.S. crop data on Monday for updates on wheat conditions and the progress of maize and soybean plantings, which have been delayed due to cold, wet weather.
CBOT corn rose 2.5% to $ 8.00-1 / 2 bushel, while CBOT soybean rose 0.9% to $ 16.60-1 / 2 bushel.
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