Wheat Prices Rise in Chicago Due to Drought; Corn Also Gains

Chicago wheat futures rose on Tuesday amid concerns about weather issues, crop conditions, and geopolitical tensions in both the Black Sea region and the Middle East, market analysts noted.

Wheat futures increased on worries over potential global supply disruptions after the Israeli military reported missile launches from Iran against Israel, and new NATO chief Mark Rutte expressed strong support for Ukraine.

The most active Chicago wheat contract climbed 2.91% to $6.01 per bushel, after earlier reaching $6.0250, its highest level since June 17.

Chicago corn gained 1.65% to $4.3175 per bushel, having previously hit $4.3250, the highest price since June 28. Chicago soybeans rose 0.71% to $10.6450 per bushel.

In addition to geopolitical tensions, wheat futures were supported by reports that Russian wheat export prices rose last week, even as shipping volumes recovered.

The U.S. Department of Agriculture (USDA) stated on Monday that U.S. farmers and grain traders are holding the largest stocks of leftover grains and soybeans in four years, as they begin harvesting what is expected to be two of the largest soybean and corn crops on record.

In other news, safe-haven currencies rose on Tuesday after Iran launched missiles toward Israel, while the dollar also strengthened following data showing a resilient U.S. labor market.

The Japanese yen fell 0.04% against the dollar, trading at 143.7 yen. The dollar had reached 144.53 yen before news of the missile launch. Against the Swiss franc, the dollar strengthened 0.2% to 0.847 units. The Swiss currency initially recovered following the missile news, before reversing gains and trading near its pre-news level. The dollar index rose 0.45% to 101.20.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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