Wheat prices rose by 5-6.5%, and in Ukraine traders stopped purchases due to rocket attacks

Reconfirming its identity as a terrorist state, Russia yesterday launched 85 rockets at peaceful Ukrainian cities, including 20 at Kyiv, killing dozens and injuring hundreds of people. The authorities of the Russian Federation presented this as a response to the destruction of the Crimean bridge, although there is no evidence that the Ukrainian special services were involved in the explosion.

As expected, the wheat market reacted to this by increasing quotations by 5-6.5%, repeating the situation the week before last, when prices rose by 4-5% per day after the announcement of mobilization in the Russian Federation. In general, in two weeks, wheat prices rose by 8-10% due to fears of further restrictions on supplies from the Black Sea ports as a result of the escalation of the war.

Against the backdrop of missile attacks and the delay in the arrival of ships in the Black Sea ports of Ukraine, traders practically stopped purchases, and on Monday the ports did not accept wheat. The market does not believe in the further operation of the grain corridor, although representatives of the UN assure that the agreement will be extended.

UN Deputy Secretary of State Martin Griffiths said on Monday that he is confident that the grain agreement concluded on July 22 in Istanbul, designed for 120 days, will be extended for a year, and the updated agreement will include provisions on the export of even more fertilizers from Ukraine.

The spokesperson of the UN on the Black Sea Grain Initiative, Ismine Palla, says that she is not aware of the plans of the Russian delegation of the SCC to reduce the inspection capabilities, although the media reports on the intentions of the Russians to reduce the number of vessel inspections to 12 per day against the 25 inspections required for stable operation. There are already more than 120 ships in the queue for inspection, which delays the time of arrival at ports for loading.

Over the weekend, 20 ships with grain left the ports of Odesa and Chornomorsk, and in total, more than 6.6 million tons of agricultural products were exported by almost 300 ships along the grain corridor.

Yesterday wheat quotes rose:

• by 6.5% or $21.2/t to $344.7/t – December futures for soft winter SRW wheat in Chicago (+9% in two weeks),
• by 5.7% or $20.4/t to $376.3/t – December HRW hard winter wheat futures in Kansas City (+10%).
• by 4.8% or $17/t to $372.7/t – December futures for HRS durum wheat in Minneapolis (+9%),
• by 1.4% or $4.5/t to $331.5/t – October Black Sea wheat futures in Chicago (+4.2%).
• by 4.7% or €16.25/t to €364.25/t or $352.87/t – December wheat futures on Paris Euronext (+14.8%).

We are convinced that Russia will be forced to extend the agreement on grain corridors, tied to the export of grain and fertilizers from the Russian Federation, given this year’s record harvest and the need for currency against the background of restrictions on oil and gas exports.

And Ukraine continues to work and export even under shelling, because there is no more fear, as at the beginning of the war.

Tags: Ukraine, Russia, prices, wheat, USA