Wheat Soars as Kyiv Blasts Boost Risks to Ukraine Grain Exports

Shafaq News/ Wheat surged to the highest price in more than three months as Russia’s attack on Kyiv and other Ukrainian cities fuels worry that an escalating war will stymie agriculture exports out of the Black Sea.

Futures in Chicago climbed as much as 7.9% to $9.495 a bushel, within cents of the daily exchange price limit. Contracts tied to other wheat classes also soared, as did corn after explosions rocked Ukraine’s capital for the first time in months.

Russian President Vladimir Putin has threatened further missile attacks, a day after he accused Ukrainian forces of damaging a bridge connecting Crimea to Russia. The intensifying conflict calls into question whether the two sides -- both key suppliers of the world’s wheat and other crops -- will agree to extend the Ukraine grain-export deal that’s due to expire in about a month.

“We cannot rule out further food-security issues if any of the key world producers have production difficulties or the situation in the Black Sea region does not improve,” Hightower Report analysts said in a note to clients.

Any slowdown out of the Black Sea could boost prices for global food staples, which had recently been retreating. There have already been challenges with Ukrainian crop shipments, as the backlog increases of outbound vessels awaiting inspection in Istanbul.

The most-active contract for benchmark wheat climbed 7.4% to $9.4575 a bushel at 10:06 a.m. in Chicago. Corn rose 2.7% to $7.02 a bushel, the highest since June 22, while soybeans pared gains and was up 0.7%. Paris milling wheat climbed to the highest in more than three months.

Russia also attacked other Ukrainian cities, including Odesa, which is a major hub for grain cargoes and one of the three ports covered by the export pact. The Odesa seaport was shut due to air strikes, a usual practice during to the war, according to the Administration of Ukraine’s Seaports.

In better news for crop shipments, a logjam of more than 2,000 US boats and barges is being cleared as two closures along the Mississippi River reopened on Sunday. Low water levels from prolonged drought had halted commercial shipments of commodities in the middle of the autumn harvest.

Traders are also awaiting a crucial crop report from the US Department of Agriculture on Wednesday. Analysts surveyed, on average, expect the agency to cut its outlook for global wheat and corn stockpiles.