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Putin announces annexation of occupied Ukrainian zones
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U.S. wheat crop shrinks on drought conditions
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Corn climbs on smaller stocks; soybeans dip after bigger-than-expected stocks
CHICAGO, Sept 30 (Reuters) - Chicago wheat spiked on Friday, supported by a drastic cut to U.S. production estimates by the Agriculture Department, and Russia's annexation of parts of Ukraine followed by increased U.S. sanctions.
Corn climbed on smaller-than-expected U.S. stockpiles, while soybeans sank after the USDA noted increased stores of the oilseed.
The most-active wheat contract on the Chicago Board of Trade (CBOT) rallied 25-1/4 cents to $9.21-1/2 per bushel, after reaching $9.45-3/4 a bushel, its highest since July 11. For the week, the contract gained 4.66%, its biggest weekly gain since Sept. 9.
CBOT corn firmed cents 8 cents to $6.77-1/2 per bushel, after climbing to $6.96-1/4, its highest since Sept. 21.
Soybeans lost 46 cents to settle at $13.64-3/4 per bushel, its lowest since Aug. 4., logging a 4.28% weekly decline, its biggest since the week ended June 24, 2022.
The 2022 U.S. wheat harvest was smaller than previously forecast, the USDA said in its annual Small Grain Summary report, cutting its assessment of the U.S. wheat crop to 1.650 billion bushels. This compared with analysts' average estimate of 1.778 billion bushels in a Reuters poll, and 1.783 billion bushels in the USDA's August assessment.
"I see (U.S. wheat) ending stocks dropping down below that 500 million bushel level and getting kind of snug, particularly for our quality milling wheat," said Arlan Suderman, chief commodities economist for StoneX.
Corn also found support from tighter-than-expected stocks, with the USDA pegging corn stocks at 1.377 billion bushels, down from trade expectations of 1.512 billion bushels.
"We chewed through a lot more corn in the livestock sector, because of the drought," said Mike Zuzolo, president of Global Commodity Analytics.
Soybean futures sank after the agency upgraded its stocks assessment to 273.76 million bushels, significantly higher than the average trade guess of 242 million bushels.
Heightening Russia-Ukraine tensions supported wheat and corn futures. Russian President Vladimir Putin proclaimed the annexation of a swathe of Ukraine in a Kremlin ceremony on Friday after holding what Russia called referendums in occupied areas. Western governments and Kyiv said the votes breached international law and were coercive and non-representative.
Tensions were also heightened by a leak from Russian gas pipelines to Europe, raising doubts about whether a United Nations-supervised shipping corridor for Ukrainian grain would last. (Reporting by Christopher Walljasper; Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Richard Chang and David Gregorio)
