Wheat Market Extends Gains as Black Sea Tensions Escalate

The wheat market is showing strength on Thursday morning, extending gains from Wednesday's rally. Contracts across the three markets are up by 4 to 7 cents. The Chicago SRW contracts hit their daily limit of 45 cents in the front months, while other contracts rose by 26 to 44 cents.

Wednesday's gains were attributed to escalating tensions out of the Black Sea, which added concerns that wheat export flows from the region will be suppressed in the near-term. Open interest was up 5,713 contracts on Wednesday, suggesting new buying. KC HRW futures were 17 to 38 cents higher across most contracts at the midweek close, with open interest up 4,308 contracts.

The Black Sea conflict between Russia and Ukraine has sparked concerns about wheat exports from the region. A report suggested that Russia is looking to escalate the conflict, which could further impact wheat export flows. Export Sales data will be released on Thursday, with analysts expecting 250,000 to 550,000 MT of wheat sold in the week ending on August 20.

The European Commission reported that EU soft wheat exports totaled 2.38 MMT from July 1 to August 23, down 1.18 MMT from the previous week. The September CBOT Wheat contract closed at $7.30 1/2 on Wednesday, up 45 cents, and is currently trading up 5 1/4 cents.