Wheat quotes rose by 3.7-6.6% as the world once again remembered Russia's aggression against Ukraine

After the CIA chief's visit to Russia, Putin ordered increased strikes on Ukraine, considering peace talks fruitless, Bloomberg reported, citing sources close to the Kremlin. This led to a sharp increase in stock market quotes for wheat and other crops.

The Kremlin believes that the negotiations have reached a dead end, so Putin is preparing to escalate the war to the point of using tactical nuclear weapons. In principle, this looks like a standard set of threats from the Kremlin, but the urgent visit of the CIA director without information about the goals and results of the meeting has greatly shaken the information space of Western countries.

Before that, everyone wondered why speculators were barely reacting to the suspension of grain exports from Ukraine since July 22 and the reduction in grain exports from the Azov and Black Sea ports of the Russian Federation. Traders optimistically hoped that the Russian Federation and Ukraine would quickly agree on the cessation of mutual strikes at sea.

However, September wheat futures rose yesterday:

• by 6.6% to $268.4/t - for soft winter SRW wheat in Chicago (+23% since the beginning of the season, +27% for the year),
• by 5% to $291/t - for durum HRW wheat in Kansas City (+ 25%, +36.6%),
• by 4% to $265.3/t - for spring HRS wheat in Minneapolis (+16.6%, +14.6%),
• by 3.7% to €236/t or $275/t for soft wheat on Euronext in Paris (+16%, +12%).

After several days of decreasing intensity, heavy shelling of Odessa and Ukraine's port infrastructure resumed yesterday, as well as heavy ballistic shelling of Kyiv and other cities in Ukraine.

Following wheat prices yesterday on the Chicago Board of Trade, December corn futures rose 2.5% to $211/t (+12.8% month-on-month, +19% year-on-year), and November soybean futures rose 2.3% to $465.2/t (+4.2%, +18%).

Rising grain prices will lead to higher prices for meat, milk, eggs, and oil, which will increase the threat of a large-scale global food crisis.

High food prices will once again force the world to pay attention to the Russian-Ukrainian war, and many countries will have to move from expressing deep concern to taking action to increase pressure on the Russian Federation to end the war. After all, Ukraine has constantly stated its readiness for negotiations, and Putin himself does not want to hold them.