Wheat Continues Surge on Black Sea Supply Concerns as Ukraine-Russia Crisis Continues
Chicago wheat futures rose sharply on Monday after hitting 13-1/2 year highs on Friday, lifted by concern that Russia's invasion of Ukraine and Western sanctions will continue to disrupt Black Sea region grain exports.
Corn and soybeans also gained on worries over Black Sea feed grain and oilseed shipments being stopped by the crisis.
The Chicago Board of Trade's most active wheat contract rose 5.35% to $9.05-3/4 a bushel by 1244 GMT, after climbing as much as 8% to $9.34-3/4. On Friday wheat hit $9.60-3/4, its highest since summer 2008.
May milling wheat futures on Paris-based Euronext were up 7.6% at 312 euros a tonne.
Corn, meanwhile, rose 3.5% to $6.78-1/2 a bushel and soybeans were up 2.3% at $16.20-3/4 a bushel.
“There are fears the fighting will not be over quickly and that wheat, grain and oilseed export shipments from Ukraine will face disruption for a longer period than initially expected,” one European trader said.
“The impact of sanctions on Russia is also being assessed. Importers will have to switch elsewhere at a time of pretty tight global supplies.”
Traders said that most Ukrainian and Russian Black Sea and Azov Sea ports remained closed on Monday, though Russia’s large grain export port Novorossiysk is operational.
Russian commodity exports from oil and metals to grains will be severely disrupted by fresh Western sanctions, analysts said.
Grain exporters are looking for alternative sources of wheat and corn as the Russian invasion cuts off Ukrainian supplies, with European Union producers Romania and France being used to cover some nearby loadings.
Russia and Ukraine account for about 29% of global wheat exports, 19% of world corn supplies and 80% of world sunflower oil exports.
“Importers are continuing to show a supply requirement this week, with purchase tenders from Egypt and Turkey among others, despite high prices,” another trader added. (Reporting by Michael Hogan in Hamburg Additional reporting by Naveen Thukral in Singapore Editing by David Goodman)
