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Operations at Mariupol port amid Russia-Ukraine conflict. Photo REUTERS/Alexander Ermochenko

Wheat grain is loaded into the cargo vessel Mezhdurechensk before its departure for the Russian city of Rostov-on-Don in the course of Russia-Ukraine conflict in the port of Mariupol, Russian-controlled Ukraine, October 25, 2023. REUTERS/Alexander Ermochenko

Wheat Futures Surge After Grain Ship Hits Mine

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December 28, 2023

By Tarso Veloso and Ilena Peng (Bloomberg) Wheat futures climbed after a vessel preparing to load grain from Ukraine hit a mine in the Black Sea, further raising fears of an escalation in the region.

Chicago prices rose as much as 2.13% after the incident. The explosion comes as attacks on ships transiting the Red Sea have snarled trade in the region, sending half of the container ship fleet that regularly uses the sea and the Suez Canal on much longer routes.

“Wheat is finding at least a bit of support again this morning on more action in the Black Sea,” Matt Zeller, senior market analyst at StoneX Financial Inc, said in a note.

Meanwhile, raw sugar jumped as much as 6.4% in New York, the biggest intraday jump since Aug. 10, 2021, showing signs of recovery after a steep slide. Futures have dropped more than 20% since an early November peak as dry weather in Brazil allowed cane harvesting and processing to continue later than usual.

But recent rainfall in Brazil’s center-south region soon could put an end to this season’s harvest, according to a Thursday ADM Investor Services note that said “the market is technically oversold and due for a correction.”

Wheat futures were up 1.2% at $6.30 per bushel at 11:50 a.m. in ChicagoSoybean futures were 0.7% lower at $13.07 per bushel

© 2023 Bloomberg L.P.

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