Wheat prices rose roughly 8% amid news of Russia’s missile attacks on Ukrainian cities. Analysts believe the escalating conflict may impact the Ukrainian grain deal due to expire in a month.
Paris-based analytics firm Agritel said in a note, “The beginning of the week could be very nervous with the risk of increased tensions in the Black Sea basin.”
Chicago Wheat futures were up to $9.48 per bushel by 1600 GMT, reflecting a 7.7% increase. Other grains, such as corn and soybeans also were up on the news.
So far this year, wheat is up 19% year over year.
The Russian missile strikes impacted all across Ukraine, including at one of Ukraine’s largest grain-exporting hubs in Odessa. The strikes were launched two days after Ukraine appeared to have attacked a bridge linking Russia with Crimea.
Analysts note any reduction in Ukrainian wheat exports will drive the prices for the staple higher.
Russia, Ukraine, and Turkey had brokered a deal to allow the Ukrainian grain to to leave Black Sea ports in Late July. Military actions had been preventing the grain’s export prior to the deal. Since early October, roughly 4.6 million tons of agricultural products have left Ukrainian ports for the global marketplace due to the agreement. Corn comprised half of those exports, while wheat made up 1.2 million tons of it.
Prior to the deal the Ukrainian government had said that there were 20-25 million tons of agricultural products waiting in Ukrainian ports for export.