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Missile attacks on Ukraine send wheat prices soaring

19-Jul-2023 - Last updated on 19-Jul-2023 at 17:15 GMT

Wheat prices leaped, leading a strong session for grain futures, as a massive attack by Russia on Ukrainian ports shattered hopes for the country’s grain exports, reports the CRM Agri team.

The attack has undermined hopes that Ukraine would be able to maintain grain exports unhindered despite the end of the Black Sea export corridor, said the UK analysts.

“Wheat futures gained 8% in both Chicago and Paris, for September-23 delivery. In London, feed wheat for November-23 stood up 6% in late deals.”

The buying spree followed an escalation overnight of Russia’s attacks on Ukraine’s grain export infrastructure, after Moscow had blocked a further extension to the Black Sea safe shipment deal, noted the UK oilseed and grain market observers.

Russia, according to Ukraine, aimed 63 missiles and drones at military and port targets, causing particular damage to Chornomorsk port, which is located to the south-west of Odesa.

Grain merchant, Kernel Holding, confirmed that its “grain transshipment facilities along with stored grain in the port of Chornomorsk have been significantly damaged.”

It added: “Initial estimates suggest that extensive time would be required to return the assets into operation.”

Ukrainian grain sale ban in central Europe

In a further setback to Ukraine’s hopes of diverting more exports overland through Europe, five countries - Bulgaria, Hungary, Poland, Romania, and Slovakia - have asked the EU Commission to back an extension, until the end of the year, of a ban on domestic sales of Ukrainian corn, wheat, rapeseed, and sunflower seeds.

Poland threatened to keep borders closed if Brussels does not agree, reported Reuters.

The EU in May allowed those countries to ban domestic sales of those Ukrainian crops, while permitting transit of such cargoes for export elsewhere. The ban is set to end on September 15.

Rapeseed, of which Ukraine is a particularly important exporter to the EU, gained some 5% in Paris for August-23 futures, rising above €500/t for the first time in four months, said the CRM Agri team.

“However, soybeans, of which Ukraine is a less important exporter, stood up a more modest 0.6% in late morning deals in Chicago.”