Soft wheat rose in price by 8.5% on news of damage to grain terminals in Ukraine

The world wheat market reacted to the attack of the grain terminals in Chornomorsk by increasing quotations, especially for soft winter wheat, which is mainly supplied by Ukraine. On the exchanges in Chicago and Paris, it rose in price by 8.2% and 8.5%.

After withdrawing from the grain agreement, the Russian Federation attacked Odesa, Chornomorsk and Mykolaiv with missiles and drones on July 19 and 20, damaging the port infrastructure. In addition, the Ministry of Defense of the Russian Federation stated that it will consider any ships heading to the ports of Ukraine as means of transporting weapons and ammunition, and will take appropriate measures.

Propagandists of the Russian Federation admire the actions of their authorities and tell how the blocking of exports from Ukraine will contribute to the increase in world prices, in particular for Russian grain, export supplies and revenues of the Russian Federation.

Yesterday, September futures rose in price:

• by 8.5% to $267.4/t - for soft winter SRW wheat in Chicago (+10.3% since the beginning of the week, +2.5% for the month),
• by 4.8% to $318.5/t - for hard winter HRW wheat in Kansas City (+4.7%, +3.8%),
• by 2.2% to $339/t - HRS durum wheat in Minneapolis (+1.5%, +5.2%),
• by 1% to $239/t - for Black Sea wheat in Chicago (+1%, -1.4%),
• by 8.2% to €253.75/t or $284.75/t - for wheat on the Paris Euronext (+9.5%, +5.3%).

According to forecasts, in 2023/24, Ukraine will reduce wheat exports from 16.8 to 8-10 million tons compared to the current season (USDA estimates it at 10.5 million tons), which will amount to only 5% of the total grain exports in the 2022 season /23. Therefore, the jump in quotations in Chicago and Paris is speculative in nature. In the new season, Ukraine exports grain only through the Danube ports, and as of July 19, it has already shipped 451,000 tons of wheat compared to 222,000 tons on this date last year. Increasing the capacity of Danube ports to 2-3 million tons of grain per month will allow exporting 10 million tons of wheat, 2 million tons of barley, almost 3 million tons of rapeseed, and 15-17 million tons of corn in 2023/24 MR.