Corn, Wheat Prices Pushed Higher Following Abandoned Black Sea Deal

Russia’s failure to extend the Black Sea Grain Deal has pushed corn and wheat prices higher.

Dr. Kim Anderson, grain market economist with Oklahoma State University, says Russia seems determined to stop wheat and other exports out of Ukraine.

“I think the markets already got that factored in there. Underlying that is Russia has been putting a lot of rockets and bombs into Odessa, and I think Russia is determined to stop wheat exports and exports out of Ukraine for a while,” says Anderson.

“Another factor is Russia has got a tremendous amount of wheat it needs to sell in exports. They’re looking at a 3.1 to 3.2-billion-bushel crop. Their average is around 2.9. They’re looking at increased carryover. Their projected exports are 1.7-plus billion bushels. Their average is around 1.2 or 1.3. They need to move a lot of product, and Ukraine competes with Russia for that wheat market and I think they want to put a halt to that,” says Anderson.

Ukraine exports multiple commodities, but Anderson says the markets mostly focus on wheat.

“They were the fourth-largest exporter of wheat. They’re now the fifth. They were at around nine or ten percent. They’re down to five now, maybe below that. But their big export is corn. They were the third-largest exporter of corn at 15 percent of world corn exports. They’re projected to be the fourth-largest at 10, so corn is important. They also export sunflower meal and sunflower oil, and they do export some barley,” according to Anderson.

He says the Ukraine conflict is affecting the prices of wheat and corn.

“Well, of course, you’ve got higher wheat prices. We’ve seen a 45-50, maybe even up to a 60-cent price increase. I think it’s from what’s going on in Ukraine. Their wheat prices are in Oklahoma up over $8 again. If you’re looking at forward-contracting the ‘24 crop, you’re looking at around $7.50 to $7.60 corn. Now that was, I think, a surprise to some people because they neglected to look at the corn exports out of Ukraine. We’ve seen a 65-cent increase in corn prices, going from up to around $5.25, maybe $5.30. They were down as low as $4.60 at one time, so you got higher prices there. Again, it goes back to what’s going on in Ukraine,” says Anderson.

Tags: wheat, markets, Black Sea grain deal, Ukraine, Russia, exports, corn, prices