U.S. grain futures rose on Tuesday, with wheat rallying to its strongest level in nearly three weeks and corn near a five-week high on persistent concerns over the Russia-Ukraine conflict that continues to disrupt Black Sea exports. As Black Sea shipments from major wheat exporters Ukraine and Russia remained hampered, further tightening global supplies, the new crop spotlight turned to winter wheat production in the U.S. Plains, where farmers face risks from drought.
News that U.S. President Joe Biden would unveil plans on Tuesday to extend the availability of higher biofuels-blended gasoline during summer to curb soaring fuel costs and to cut reliance on foreign energy sources was also supportive.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 3.1% at $11.22-1/2 a bushel by 1100 GMT, shortly after touching $11.25, its highest since March 23. The U.S. Department of Agriculture (USDA) on Monday rated 32% of U.S. winter wheat in good-to-excellent condition, up two percentage points from a week ago and above an average of analyst expectations.
Nonetheless, it was among the poorest ratings on record for this time of the year amid drought in the Plains wheat belt. The CBOT corn contract gained 1% to $7.72-3/4 a bushel, hovering near a five-week high of $7.78 scaled in the previous session.
"While higher-than-expected global ending stocks should be bearish for the corn market, the risk around Ukrainian supply continues to offer support," said Warren Patterson, ING head of commodities strategy, citing the latest stocks estimate for 2021/22 by the USDA.
Concerns about global supplies and strong demand also supported European wheat prices with front month May futures on Paris-based Euronext rallying nearly 4% to 394.25 euros ($428.35) a tonne, the highest level since March 9. Corn prices were also supported amid some private sales of U.S. corn to China and high crude oil prices.
The USDA's lower global production forecast, meanwhile, supported soybean prices even as downscaled Chinese needs have clouded the overall demand outlook. CBOT soybeans climbed 0.9% to $16.72-1/4 a bushel, below a two-week high of nearly $17 hit in the previous session.
(Reporting by Enrico Dela Cruz in Manila and Sybille de La Hamaide in Paris; Editing by Sherry Jacob-Phillips, Kirsten Donovan)