Chicago Board of Trade wheat futures rose sharply on Tuesday, reaching a three-and-a-half-year peak after reports emerged that Moscow had declined a proposed moratorium on attacks in the Black Sea and that port facilities in the region were struck overnight.
At 10:25 a.m. CT the most-active wheat contract was trading up 13-1/2 cents at $7.87-1/4 per bushel. Earlier in the session the contract hit $7.92-1/4, the highest settlement level observed since February 15, 2023.
Ukrainian officials reported that overnight strikes targeted port infrastructure in the southern Black Sea area of Odessa and a border crossing with Romania. Ukrainian President Volodymyr Zelenskiy said the attack intentionally damaged a crossing point on the Romania border as well as export-related infrastructure.
Wheat futures had initially moved lower in the session after comments from Turkey indicating it was communicating with both Russia and Ukraine about grain shipments through the Black Sea. Market participants then pushed prices higher following the reports of fresh attacks and the alleged rejection of a moratorium.
Other major U.S. grains also advanced. Corn reached a three-year high, supported by a weak U.S. crop and by spillover buying from the wheat market. Soybeans climbed to their strongest levels in more than two-and-a-half years after a biofuels announcement the previous day, continued purchases of U.S. soybeans by China and concerns that hot, dry weather could harm the U.S. soybean crop.
The moves in futures reflect a mix of supply concerns tied to reported damage in export infrastructure and ongoing weather and crop-quality worries in the United States, alongside persistent international demand.
Key points
- Chicago wheat futures reached their highest levels since February 15, 2023, touching $7.92-1/4 per bushel and trading at $7.87-1/4 at 10:25 a.m. CT when recorded.
- Reported strikes on port infrastructure in Odessa and damage to a Romania border crossing were cited by Ukrainian officials, and Ukrainian leadership said export infrastructure was deliberately hit.
- Corn and soybeans also advanced - corn to a three-year high amid a poor U.S. crop and spillover effects from wheat, and soybeans to a multi-year high on biofuels policy news, continued Chinese purchases and hot, dry weather concerns.
Risks and uncertainties
- Ongoing strikes in the Black Sea region could further disrupt export infrastructure and shipping routes, affecting global grain flows and market stability.
- U.S. crop quality remains a concern, with hot, dry weather cited as a factor that could reduce soybean yields and support higher prices.
- Diplomatic efforts - such as contacts by third parties over grain shipping - may alter market sentiment quickly, as evidenced by earlier intraday reversals following Turkey's statement about communications with Russia and Ukraine.