Wheat Slumps as Big Crops Let Traders Shrug Off Ukraine Angst

Wheat fell more than 4% as traders shrugged off concerns about Ukraine’s exports and escalating tensions in the Black Sea amid ample global supplies, Bloomberg reported.

The market is taking a breather after surging about 11% in the previous three sessions after both Ukraine and Russia warned that ships headed to each other’s ports could be considered military targets. The tensions increased concerns that exports would be cut off from the region, considered the breadbasket of the world. Ukraine is the third-largest global exporter of corn and the sixth-largest wheat shipper.

Prices slid on Friday as traders reconsidered the threats to global food supplies. The world still has a large buffer of wheat stockpiles. Ukraine can also turn to other avenues for its grain exports, such as trains and barges, to move away from its reliance on deep-sea ports such as Odesa and Chornomorsk.

The move lower comes at the end of a volatile week that saw the Kremlin terminate the Black Sea grain deal that had kept cargoes of staple crops flowing through the corridor, and then attack Ukraine’s agricultural facilities.

Ukraine is trying to restart trade through the corridor, though there’s doubt over whether the goal is realistic. Ukrainian President Volodymyr Zelenskiy instructed his top military commanders on Friday to prepare “actions” that could allow the grain deal to continue functioning. He also told the foreign ministry to prepare “analogous diplomatic steps.” The statement on Zelenskiy’s Telegram didn’t elaborate on what the measures may be.

Senior officials from Turkey, which brokered the deal with the United Nations, said grain exports from Ukrainian ports are unlikely and that Turkey wouldn’t be involved in any shipment as Russia has threatened it may target the vessel.

Russia, the No. 1 wheat shipper, continues to export its robust supplies.

“We have to watch very closely the pace of Russian exports as well,” said Ben Buckner, chief grains analyst for AgResource Co.