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Wheat futures are on course for the lowest result in a month on hopes of progress in talks between Ukraine and Russia

Wheat futures were among commodity prices that took a hit on Tuesday as traders reacted to news of potential progress in negotiations between Ukraine and Russia, and perhaps the beginning of the end of the a brutal 34-day conflict.

“A ceasefire or a decrease in hostilities could reassure markets that supplies of Russian and Ukrainian wheat that were harvested last year, and now trapped in the war zone, could become more accessible to the world,” said Sal Gilbertie, President and Chief Investment Officer at Teucrium. , MarketWatch said on Tuesday.

However, “it is too early to determine the long-term impacts of a ceasefire,” he said.

Russia’s deputy defense minister said Moscow had decided to “significantly reduce combat operations” around Ukraine’s capital Kyiv and the northern city of Chernihiv, the BBC reported on Tuesday.

Moscow’s chief negotiator in talks with Ukraine says Russia’s promise to scale back military operations in kyiv and northern Ukraine does not represent a ceasefire, BBC reports .

In this context, soft red winter wheat for delivery in May W00,
-4.14%

WK22,
-4.14%
slid 5.6%, down 59 cents to $9.98 a bushel in Chicago, which would mark its biggest one-day drop since March 18, according to FactSet data. A settlement around that level would be the lowest for a most active contract since March 1.

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The commodity jumped 40% to its biggest weekly gain since 1959 earlier this month at the start of the Russian invasion of Ukraine. Prices remain up nearly 7% for the month so far and are trading around 29% year-to-date.

To see: Russian-Ukrainian war fuels ‘biggest supply shock in world grain markets’ in living memory

Corn and soybean futures also saw steep declines on Tuesday.

May corn C00,
-2.74%

CK22,
-2.74%
was trading at $7.14 3/4 a bushel, down 33 3/4 cents, or 4.5% in Chicago. May soy S00,
-1.23%
lost 35 1/4 cents, or 2.1%, to $16.29 a bushel.

There is optimism that “products will come out of the Black Sea region more easily and farmers will be able to get more spring wheat, corn, barley and sunflower.” crops in the ground over the next few weeks,” analysts at Peak Trading Research wrote in a note on Tuesday.

Still, “this situation remains very fluid and the headlines continue to come out,” they said.

Grain futures were among many commodities on Tuesday that traded lower on apparent progress in peace talks.

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Gold GC00,
-1.20%

GCJ22,
-1.20%
and silver SI00,
-1.14%

SIK22,
-1.14%
futures touched their lowest intraday levels in more than a month and US benchmark oil futures CL.1,
-1.21%

CLK22,
-1.21%
briefly dipped below $100 a barrel for the first time since March 17.

Barbara Kollmeyer in Madrid contributed to this report.