KANSAS CITY — An escalation of attacks in Ukraine and Russia has been a dominant factor in the grain markets recently, partly due to the lack of major market-moving news domestically. South American weather was being closely watched while traders awaited the key US Department of Agriculture annual Prospective Plantings report March 29.

The impact of the war in Ukraine on the grain markets has waxed and waned over the past two years, initially sending prices sharply higher over fear of export disruptions from the key Black Sea region and potential global grain shortages. While disruptions occurred, mainly out of Ukraine, shipments from top wheat exporter Russia barely faltered and increased opportunities for US exports never materialized. As the war continued, there was less market impact except for the occasional flare-up.

Recent activity, though, has again caught the market’s attention amid stepped-up attacks by Russia on Ukraine’s export infrastructure and drone and missile strikes on oil refineries by Ukraine deeper into Russia.

Nearby corn and soybean futures fell to three-year lows in late February while most wheat futures hit their low marks in early March, all from ample bearish fundamentals, including weak export demand amid Russia’s ongoing strong wheat exports and large corn and soybean crops in South America. At the same time, US winter wheat prospects were improved from a year earlier with far better moisture profiles across most of the hard red winter wheat growing region. Meanwhile, China recently canceled nearly 30% of its US soft red winter wheat purchases of 1.631 million tonnes as prices had dropped well below levels when the purchases were made late last year.

The markets appear to have bottomed, with corn futures up nearly 30¢ a bu and soybeans up about 60¢ from February lows. The rebound in wheat futures has not been as dramatic as in corn and soybeans with prices fluctuating modestly above recent lows. Gains of about 2% in wheat futures on March 18 were attributed to an escalation of Russian attacks on Ukrainian ports, including Odesa and Mykolaiv, with Putin suggesting tensions could further escalate.

Ample wheat supplies in Russia and other countries were expected to limit gains in wheat prices. Persistent strength in the value of the US dollar (with fluctuations) further limited gains as a strong dollar makes US exports more expensive globally.

Much is known about the US winter wheat crop with acreage established for some time, and a forecast of a 16% reduction from a bumper 2023 crop in soft red winter wheat production from participants at the recent North American Millers’ Association spring meeting. Both hard red and soft red winter wheat crops emerged from dormancy amid mostly favorable moisture conditions. The first USDA winter wheat production forecast will be issued May 10.

Much more uncertainty remains about 2024 corn and soybean crops with the start of planting in major states just a few weeks away. In general, the trade expects lower corn planted area after record-high production in 2023 sent prices plunging about 25%. It also anticipates higher soybean planted area with returns expected more favorable than corn and some other crops. Acreage ideas will begin to come into focus with the March 29 Prospective Plantings report, although farmers still can make adjustments right up to planting time.