Wheat returns to pre-war price after Russia-Ukraine deal

Ukraine and Russia signed today in Istanbul, in the presence of the UN, two agreements that will allow the export of Ukrainian cereals blocked in Black Sea ports.

the price of wheat fell sharply on Friday in Chicago and on Euronext, after the agreement signed in Turkey between Moscow and Kiev to allow the export of Ukrainian grain through the Black Sea, returning to pre-war levels.

In Chicago, a bushel of wheat (about 27 kg) for September delivery closed down 5.86% at $7.5900. Corn was down 1.99% at $5.6425 on the same month contract.

Ukraine and Russia signed today in Istanbul, in the presence of the UN, two agreements that will allow the export of Ukrainian cereals blocked in the Black Sea ports by the war and that are essential in world markets. Ukraine and Russia together account for 30% of the world’s wheat trade.

“I didn’t expect this as the Russians move eastward and approach the port of Odessa,” said Michael Zuzolo, president of brokerage and analytics firm Global Commodity Analytics and Consulting.

“Market reaction suggests that there was a premium on (price of) wheat on the market, mainly in Europe and to a lesser extent on futures contracts in Chicago” and now “that premium is being removed,” he said.

On Euronext, wheat closed at 325.75 euros a tonne for September delivery, down 6.7%.

Source: AFP