Wheat prices surge as Kremlin drone attack stokes Black Sea tensions

The flare-up comes at a sensitive time for the future of the safe corridor that allows Ukraine to export crops through the Black Sea. The deputy defence ministers of Turkey, Russia and Ukraine are due Friday to discuss an extension of the deal which Moscow has said could expire on May 18, according to Turkish media reports.

Russia will hold talks with United Nations representatives in Moscow on the same date, the Foreign Ministry said, according to Tass. Almost 30 million tons of crops have been shipped to the world market under the deal since July, with China the top destination followed by Spain and Turkey. Corn shipments account for about half of the cargoes, and wheat for around a quarter.

The eruption in tensions was enough to spark a raft of buying in the wheat market where money managers had built the biggest net-short position in more than five years. Prices had slumped to a two-year low on a favourable crop outlook in the northern hemisphere, which grows most of the world’s wheat.

The drone attack renewed worries about global wheat supplies and sparked some concerns among traders that the recent selloff may have gone too far, Farm Futures analyst Jacqueline Holland said by email.

Wheat futures in Chicago climbed as much as 1.2 percent to $6.475 a bushel, before trading at $6.41 by 2:40 p.m. in Singapore. Prices jumped 5 percent a day earlier. Corn prices fell 0.3 percent on Thursday, while soybeans were little changed.