Corn futures soar by daily trading limit on Black Sea supply fears

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By Tom Polansek

CHICAGO, Feb 28 (Reuters) – U.S. corn futures jumped by their daily limit on Monday while wheat futures spiked after hitting 13-1/2-year highs on Friday on concerns that Russia’s attack on Ukraine will continue to disrupt exports from the Black Sea region.

Ukrainian ports will remain closed until Russia’s invasion ends, the head of Ukraine’s Maritime Administration said, adding that the port of Mariupol has sustained damage from Russian shelling.

Fears about damage to Ukraine’s infrastructure also fueled doubts over planting of the country’s 2022 corn crop, grain traders said.

Russia invaded Ukraine on Feb. 24, calling its actions a “special operation”. Russian forces encountered resistance from Ukrainian troops and civilians on a fifth day of conflict on Monday.

Egypt’s state grains buyer, the General Authority for Supply Commodities, on Monday canceled a second international tender for wheat amid supply uncertainty and market turbulence following the invasion.

Consultancy Strategie Grains said the attack on Ukraine is expected to halt the processing and export of Ukrainian oilseed crops for at least a month.

Most-active wheat futures Wv1 were up 66-1/2 cents at $9.26-1/4 a bushel by 11:25 a.m. CST (1725 GMT), after reaching a session high of $9.34-3/4. On Friday, the contract touched $9.60-3/4, its highest since summer 2008.

Most-active corn futures Cv1 climbed the daily 35-cent limit to $6.90-3/4 a bushel, while soybeans Sv1 were up 65 cents at $16.49-1/2 a bushel.

“The prospects of Black Sea grain flows halted for 1-3 months will attract new buying on breaks,” Rich Feltes, head of market insights for broker RJ O’Brien, said in a note.

Russia and Ukraine account for about 29% of global wheat exports, 19% of world corn supplies and 80% of world sunflower oil exports.

“There are fears the fighting will not be over quickly and that wheat, grain and oilseed export shipments from Ukraine will face disruption for a longer period than initially expected,” a European trader said.

Exporters reported the sale of 136,000 tonnes of U.S. soybeans to China for delivery in the 2022/23 marketing year and 120,000 tonnes of U.S. soybeans for delivery to unknown destinations during 2021/22, the U.S. Department of Agriculture said.

(Reporting by Tom Polansek in Chicago and Michael Hogan in Hamburg Additional reporting by Naveen Thukral in Singapore Editing by David Goodman, Tomasz Janowski and Grant McCool)