The threat of blocking ports and invading Ukraine has led to a sharp increase in world wheat prices

The main driver of global markets on Friday was the US statement about a possible Russian invasion of Ukraine this week. Most countries have called on their citizens to leave Ukraine, while Western countries are demanding that Russia withdraw its troops from the border with Ukraine and ensure the free movement of ships in the Azov and Black Seas, where Russia is currently conducting military exercises. Possible disruptions in wheat supplies from the Black Sea region have led to a sharp increase in wheat prices on world stock exchanges.

After the bearish USDA report, wheat prices fell for several days, and traders made profits and made speculative purchases amid frosts in the United States and political tensions in Ukraine.

But on Friday, March wheat futures rose:

• by 9 9.65 / ton to 2 293.1 / ton for soft winter SRW wheat in Chicago (+3.4% for the week),
• by 8 8.54 / ton to H 302.9 / ton for hard winter HRW wheat in Kansas City (+2.9%),
• by 7 7.07 / ton to 3 353.3 / ton for hard spring HRS wheat in Minneapolis (+2%),
• for European wheat on Paris Euronext by 7.25 € / ton to 268.75 €/ton or 304.9 € / ton (+1.2% for the week, but -3% for the month),
• on Black Sea wheat on the Chicago Stock Exchange by 5 5.25/ton to 3 320.5/ton (+1.9% for the week, but -0.5% for the month).

Contrary to expectations, Russia did not step up wheat exports until the introduction of quotas from February 15. According to the Customs Service, as of February 10, exports (excluding deliveries to the EAEU countries) amounted to 21.6 million tons, which is 28.5% lower than last year’s pace.

Markets are concerned about Russia’s closure of traditional shipping routes in the black and Azov seas for the period of military exercises from February 13 to 19. The Azov ports of Ukraine will be blocked at this time. Kyiv says the presence of warships, which hinders navigation in these regions, is part of a “hybrid” war.

In February, Russia is conducting naval exercises in the Black and Azov seas and at the same time land exercises on the border of Ukraine and Belarus, which the world considers a demonstration of force and preparation for an invasion, which Moscow denies.

GrainTrade

Tags: wheat, blocking ports, war, Ukraine, Russia, prices, Black Sea region