Following the announcement by the Russian government that it would be discontinuing its participation in the UN-facilitated Black Sea Grain Deal, which arranged a mechanism by which Ukrainian grain could be exported to the world market, wheat prices soared on Monday, according to trading data.

On the Chicago Mercantile Exchange, August wheat futures were up 4.24% to $6.89 per bushel as of just minutes after news broke of the Russian decision. Some of the gains were later given back, however as of 11:30 GMT, the futures were still trading up 2.9%. Corn and soybeans also saw their futures rise.

Earlier in the day, Moscow had sent word to Ankara, which had been mediating negotiations, as well as Kiev and the Secretariat of the UN that is would be discontinuing the agreement to provide a safe corridor for ships to carry Ukrainian grain out of Black Sea ports. Russian Presidential Spokesman Dmitry Peskov noted Russia could return to the deal if all parties involved would implement the measures which had already been agreed upon.

The agreement between Russia and Ukraine, which was mediated by the UN and Türkiye was signed in July of 2022. It had since been extended, and was set to expire on July 18th. The deal included a memorandum between Russia and the UN which was aimed at facilitating the export of Russian agricultural products. Although agricultural products were not explicitly targeted by the sanctions imposed on Moscow by the Western powers, other restrictions, such as measures designed to block Russia’s use of Western financial mechanisms have impacted Russia’s ability to be paid for exports, and that has impacted the export of such goods.

The memorandum had provisions to help alleviate these difficulties, such as by reconnecting Russia’s major agricultural lender, Rosselkhozbank, to the SWIFT international financial transfer system, as well as lifting other Western sanctions which were making it difficult to insure Russian cargo and handle the logistics of shipments.

However despite the memorandum, those measures were never implemented, and Russia complained it had seen no benefits from the agreement.

Russia had been warning the UN that unless the agreement was honored, it would have no reason to support any extension of the deal.