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Tuesday, March 21, 2023

Wheat Prices Surge on Black Sea Grain Deal Collapse

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Wheat futures soared nearly 8% on Monday after Russia withdrew from a grain export deal with Ukraine following an attack on ships involved in securing the trade route through the Black Sea.

Chicago wheat futures rose 5.5% to $8.75 per bushel on Monday after hitting a high of $8.93 at the start of trade. Corn increased by 2.2% a bushel, while soybeans added 1% to $14.13.

The grain deal, brokered by the UN and Türkiye, was agreed between Russia and Ukraine in July. It was aimed at unlocking agricultural exports via the Black Sea from Russia and Ukraine, which were halted due to the military conflict between the two states.

On Saturday, Moscow halted its compliance with the deal after a drone attack on vessels of the Russian Black Sea Fleet involved in providing safe passage for agricultural cargo. Kiev neither confirmed nor denied carrying out the assault, calling Russia’s decision “primitive blackmail.”

On Monday, the Joint Coordination Centre (JCC) in Istanbul said the UN, Türkiye and Ukraine had agreed on a movement plan for 16 vessels that are located in Türkiye’s territorial waters despite Russia’s decision to suspend the deal.

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