Wheat futures jumped nearly 6% at Monday’s opening in Europe after Russia pulled out of a UN-backed deal to allow safe passage for exports from Ukraine across the Black Sea.
The price of wheat on CME’s electronic trading platform jumped to $ 889 per bushel, before slashing earnings to $ 878.90 per bushel at 4:50 am.
Russia suspended its participation in the Turkish-brokered deal over the summer after Ukrainian drones attacked the Russian Black Sea fleet in the Crimean port of Sevastopol over the weekend. The deal has allowed Ukraine to ship more than 9 million tons of agricultural products out of its ports since it went into effect three months ago, with a significant effect on the overall balance of the global market. Russia and Ukraine together accounted for nearly 30 percent of global grain exports last year, and the war between the two nations threatened to cut off supplies to some of the world‘s poorest countries.
World prices have fallen by nearly 30% since speculation about a deal began, and its suspension now carries the risk of a dramatic reversal in prices not only for wheat, but also for maize, sunflower and sunflower seeds. ‘oil. Saxo Bank strategist Ole Hansen pointed out in a statement that the suspension comes at a difficult time for the markets: data from the Commodity Futures Trading Commission suggests that fund managers have been betting more and more on falling grain prices in the recent weeks, with a net short positioning in Chicago wheat futures reaching a high of 28 months in the week through last Tuesday.
Corn futures also rose 2.8%, reaching a two-week high of $ 698.75 a bushel, while US soybean futures rose 0.9%.