A missile hit a ship in the port of Pivdennyi led to a speculative rise in wheat prices

The news of a missile hitting a ship in Pivdennyi port led to a sharp speculative rise in wheat prices.

As it turned out, when a civilian vessel flying the Liberian flag was entering the port to load ore, Russians from a tactical aircraft in the Black Sea hit the superstructure of the ship with an X-31P anti-radar missile, once again confirming their identity as a terrorist country. As a result of the incident, a Ukrainian pilot was killed, 3 crew members (Filipino citizens) were injured, one of them hospitalized, and a port worker was also injured.

Against this backdrop, December wheat futures rose yesterday:

• by 3.8% to 217.6 $/t – for soft winter SRW wheat in Chicago
• by 3.6% to 240.7 $/t – for hard winter HRW wheat in Kansas City,
• by 1.6% to 270.2 $/t – for hard spring HRS wheat in Minneapolis,
• by 1.5% to 235,75 €/t or 252,5 $/t – for wheat on the Paris Euronext.

Also, the quotes were supported by the results of the tenders in which the Algerian Agency OAIS purchased 580 thousand tons of milling wheat (presumably of black sea and French origin) at a price of 266 $/t C&F for delivery in December – January, and the state Agency of Jordan – 60 thousand tons of wheat from Ameropa at a price of 276 $/t for delivery in the first half of February 2024.

Traders do not expect significant changes in the global balance of wheat in the USDA report, which will be released today.

The USDA experts believe that over the next 10 years, the wheat production in the country will not change significantly: the sowing areas will remain at 45.5 mln acres, and the harvest will be within 37 mln tons. Wheat prices will also remain stable at $6/bushel or $220/t.

Tags: wheat, war, Black Sea grain corridor, Ukraine, prices