The Russian Federation's decision to restrict the movement of ships to the port of Novorossiysk led to an increase in wheat exchange prices by another 2-4%

Reuters, citing several sources in the grain industry, reported yesterday that Russian authorities have unofficially restricted vessel traffic to the port of Novorossiysk (Russia's largest grain export port) from 5 a.m. on July 22. Vessels are prohibited from entering or leaving the port due to the risk of attacks by Ukrainian drones. This news led to a sharp speculative increase in wheat prices, which have already increased by 15-28% in three weeks.

Yesterday, September wheat futures rose in price:

• by 4.1% to $259.3/t - for soft winter SRW wheat in Chicago,
• by 4.1% to $280.5/t - for durum HRW wheat in Kansas City,
• by 3.5% to $267.9/t - for spring HRS wheat in Minneapolis,
• by 2% to €244.25/t or $279/t for soft wheat on Euronext in Paris.

At the same time, the Russian Federation continues to attack Odessa and other port cities of Ukraine with missiles and drones, damaging infrastructure and international civilian vessels entering Ukrainian ports, which completely stopped the entry of vessels into Black Sea ports. Yesterday, the grain terminal of the American trading company ADM was hit. Therefore, we expect a Ukrainian retaliatory strike on the Russian grain terminal in Novorossiysk in the coming days.

Restrictions on exports from Ukraine and restrictions on shipping through the Azov-Don Canal in the Russian Federation led to an increase in prices for Russian protein wheat by 12.5% by $7-10/t to $235-240/t FOB Black Sea during the week, as well as an increase in prices for French and Romanian wheat by $16-19/t, and for American wheat by $12/t to levels of $250-260/t FOB.

At the same time, in Ukraine, purchase prices for food wheat in Black Sea ports fell to $175-180/t due to the suspension of exports and losses of traders.

But we hope that traders will soon resume purchasing Ukrainian wheat in the port of Constanta, Romania, which, even against the backdrop of rising freight prices on the Danube, will allow us to receive slightly higher prices, given the increase in prices for European wheat.