Market moves
Euronext wheat prices advanced on Friday, extending gains for the week as military operations in and around the Black Sea heightened concern about the flow of grain from Russia and Ukraine. December wheat on Euronext increased 1.3% to €235.75 per metric ton at 1553 GMT after trading as high as €237.50, a two-week peak. The contract was positioned for a 1.6% rise over the week.
Nearer-term contracts also firmed. September futures led the session's gains, climbing 2.5% to €227 per ton. Traders said the front-month contract benefited from technical adjustments ahead of its imminent expiry.
Across the Atlantic, Chicago wheat futures rose by roughly 3%, with additional support coming from a decline in the dollar that underpinned commodity buying.
Drivers of the move
Market participants cited renewed hostilities and specific strikes as factors pushing prices higher. Ukraine’s military reported it struck Russia’s Novatek gas condensate processing complex in the Baltic port of Ust-Luga. Separately, reports that Russia rejected a proposed Black Sea truce added to concerns about the stability of maritime corridors.
Weeks of attacks on shipping by both Russia and Ukraine in their 4-1/2-year-old war have already cut shipments, including at Russia’s principal grain export hub of Novorossiysk. The more recent strike on the Baltic port has prompted questions about whether alternative routes for Russian grain exports remain viable.
Key points
- Euronext December wheat rose 1.3% to €235.75 per metric ton and was tracking a 1.6% weekly gain.
- September futures were up 2.5% to €227 per ton, helped by technical adjustments ahead of expiry.
- Chicago wheat futures climbed about 3%, with part of the move attributed to a weaker dollar.
Risks and uncertainties
- Continued attacks on shipping in the Black Sea and surrounding regions may further reduce grain shipments, affecting supply to global markets.
- Russia’s rejection of a potential Black Sea truce increases uncertainty over the security of export routes for Russian and Ukrainian grain.
- The strike on the Baltic port of Ust-Luga raises questions about the availability of alternative export corridors for Russian grain, which could prolong disruptions.
The situation remains fluid, with market participants monitoring developments that could influence both physical shipments and futures positioning in the near term.