Wheat Futures Hold Near Two-Year High as Black Sea Tensions Escalate

Wheat futures at the Chicago Board of Trade (CBOT) held steady near a two-year high on Thursday, buoyed by mounting concerns over global supply and significant shipping disruptions in the Black Sea.

Hostilities Disrupt Key Grain Routes

Tensions in the vital grain export zone flared as both Russia and Ukraine reportedly launched missile and drone attacks on vessels in the Black Sea and the Sea of Azov on Thursday. The conflict is directly impacting logistics in the region.

According to a statement from the Ukrainian state railway, Ukrzaliznytsia, two of Ukraine's three Black Sea ports were operating normally as of Thursday morning. However, the port of Chornomorsk has sharply curtailed its grain intake, signaling a direct impact on export capacity.

Market Reaction and Price Levels

The ongoing conflict and supply fears have supported a recent rally in wheat prices. Key futures contracts showed mixed but firm trading on Thursday:

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• CBOT September soft red winter wheat was last up 1/4 cent at $6.77-3/4 per bushel.
• Kansas City September hard red winter wheat traded down 2-3/4 cents at $7.17-1/4 per bushel.
• Minneapolis September spring wheat was last down 1 cent at $6.82-1/4 per bushel.

U.S. Export Data Shows Weakness

Countering the supply-side pressures, U.S. export data came in below expectations. The U.S. Department of Agriculture (USDA) reported net U.S. wheat export sales of 235,102 metric tons for the week ending July 9.

This figure fell short of trade estimates, which had ranged from 250,000 to 600,000 tons. For now, traders appear to be weighing the geopolitical risks in the Black Sea more heavily than the softer U.S. demand figures.