Chicago wheat futures fell to a two-week low on Thursday as an extension of a deal to allow war-ravaged Ukraine to continue exporting grains through Black Sea ports eased concerns over world supplies.

Corn and soybean prices were also lower as favourable weather helped newly planted crops in the Midwest.

The Ukraine Black Sea grain deal was extended on Wednesday for two more months, a day before Russia could have quit the pact over obstacles to its grain and fertilizer exports.

ING said in a note that the extension would “help ease some supply concerns in the market” while adding there would continue to be uncertainty about what would happen next.

Ukraine had sought a longer extension while Russia continues to demand more should be done to boost its own exports of grains and fertilizers.

The most-active wheat contract of the Chicago Board of Trade (CBOT) was down 1.4% to $6.17 a bushel at 0852 GMT, after setting a two-week low of $6.15-1/4.

However, losses in the wheat market were limited by expectations of lower winter output in the United States.

Crop scouts on the second day of an annual three-day tour of Kansas projected an average yield for hard red winter wheat in the southwestern portion of the state at 27.5 bushels per acre, the worst since at least 2003 and down from 37 bushels per acre last year.

The Wheat Quality Council tour’s five-year average for the same area from 2017-2022 was 44.68 bushels per acre. No tour was held in 2020 due to the COVID-19 pandemic.

Corn futures faced pressure after the U.S. Department of Agriculture said private exporters cancelled purchases of 272,000 tonnes of old-crop U.S. corn earmarked for China, the fourth such cancellation in the last month.

CBOT corn futures fell 0.8% to $5.57-1/4 a bushel, slipping back towards the prior session’s 18-month low of $5.54-1/4.

Meanwhile, the 2023 U.S. corn and soybean crops are off to a solid start, with a faster-than-average planting pace and mostly crop-friendly weather pointing towards rising supplies.

CBOT soybeans fell 0.2% to $13.33-3/4 a bushel.

Source: Reuters