Wheat extends gains as Russia-Ukraine escalation risks threaten Black Sea supplies
Chicago wheat futures rose for a third consecutive session on Monday after Russia signaled a possible intensification of strikes on Ukrainian infrastructure. The most-active contract gained as much as 1%, extending its longest rally in about a month.
The market is reacting to the risk of further disruptions to grain shipments through the Black Sea, one of the world’s key wheat trade corridors. Supplies from the region have already been significantly constrained since July by security and logistics problems.
Additional uncertainty came from Russian statements about plans to intensify attacks on Ukrainian infrastructure. Further escalation could disrupt port operations and maritime routes, keeping a higher risk premium embedded in grain prices.
Russia’s wheat exports fell 75% y/y in September to 1.36 mln tons, according to data cited by Bloomberg. Further disruptions in the Black Sea region could tighten grain availability from one of the world’s largest export hubs.
CRM AgriCommodities analysts said Turkish mediation could eventually help restore more stable shipments, although reaching an agreement could take several months. Progress in negotiations could reduce the risk premium, while prolonged disruptions would continue to support wheat prices.
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