Analysts said that the benchmark Chicago corn and wheat contracts rose by about 1% on Monday, boosted by concerns over tensions in the Black Sea grain-export region, as well as the cold weather that is slowing down grain movement in the U.S. Midwest.

They said that the decline in soybean futures was due to favorable South American weather conditions and a drop in soymeal contracts.

Chicago Board of Trade March Corn was up 4-1/2 Cents to $4.49-1/2 and March Wheat was up 5-1/2 Cents to $5.40-1/2. CBOT January soyabeans were down by 2-1/2 cents to $11.25-1/2 per bushel. Traders monitored the risks to Black Sea Shipping from the conflict in Ukraine. The drone attacks by Ukraine last week on two oil tankers heading for a Russian port was followed by an attack Tuesday on a Russian flagged vessel transporting sunflower oil. An official from Ukraine said that Ukraine had not been involved in the attack on Tuesday, but Russian President Vladimir Putin has threatened to cut off Ukraine's sea access.

The first Russian invasion of Ukraine took place nearly four years ago. Prices soared on the fear that exports from this important region would be restricted. In a client letter, StoneX's chief commodity economist Arlan suderman warned that the threat could reappear.

Other noted a firming of the U.S. Cash Markets after wintry weather slowed down grain movement in Corn Belt and frigid temperatures followed heavy snowfall on the weekend in northern areas.

"Out here on the farm, basis levels are firming up to purchase grain from the farmer. "The funds are tight, so you're seeing a bit of short-covering, as the cash markets firm up," said Don Roose. He is the president of U.S. Commodities in Iowa. The cold weather has slowed the movement. "Call it a transport premium." Soybean Futures dropped as South American weather conditions continued to boost expectations of a large Brazilian harvest. Traders continue to assess Chinese demand for U.S. supplies of soy. The United States Department of Agriculture announced that no "flash" sales of U.S. soy were made on Tuesday. This follows a series of bookings confirmed the previous week.

Josh Lawrence, an adviser at IKON Commodities Sydney, said that soybean bulls would be looking for more U.S. announcements of exports to China in order to break out of the rangebound trading established in November.

(source: Reuters)