Suspension of deal raises wheat price

After Russia announced it was suspending the Black Sea deal, the price of wheat futures on the Chicago Mercantile Exchange rose more than 5 percent to $8.7. Wheat futures on the Chicago Mercantile Exchange (CBOT) rose 5.4 percent to $8.7 as Russia’s withdrawal from the Black Sea Grains Initiative fueled global supply concerns. Wheat prices settled at $8.7 as of 9:25 a.m. after rising to $8.9 earlier in the day, the highest level since Oct. 14. Corn prices rose 2.2 percent to $6.96 a bushel, while soybeans rose 3 percent. Price hit record in March Wheat prices had hit a record high in international markets in March, rising to $13.6 as supply problems from the Russia-Ukraine war brought to the forefront and rising energy prices. Since Russia and Ukraine are among the world’s largest wheat suppliers, grain markets are sensitive to developments in Moscow’s eight-month war with Kiev. Despite the sharp movements seen in wheat in the first half of this year, recent declines in wheat prices have been notable. While the downward trend in the commodity market continued as aggressively tightening monetary policies around the world increased concerns about a recession, wheat also saw significant sales. Although concerns about the Russia-Ukraine war persisted, the reopening of grain exports from Ukraine through Russia’s Black Sea Grain Initiative increased selling pressure on agricultural commodities, and wheat prices fell to $7.4. Why did Russia withdraw? The Russian Defense Ministry announced on October 29 that Ukraine had launched an attack on Russian war and civilian ships in the city of Sevastopol in annexed Crimea. The statement noted that a large number of unmanned aerial vehicles were used in the attack and all of them were destroyed, and that the Black Sea Fleet ships that were attacked were involved in the process of ensuring the security of the corridor established under the grain agreement. The ministry's statement said that Kiev "carried out a terrorist act against Black Sea Fleet ships and civilian vessels involved in ensuring the security of the grain corridor with the participation of British experts." The statement said, "Considering the terrorist act, the Russian side suspended its participation in the implementation of agreements on the exit of agricultural products from Ukrainian ports." The Black Sea Grain Initiative, which is being carried out under the coordination of Turkey to solve the global food crisis, was signed by Ukraine, Russia, Turkey and the United Nations (UN) in Istanbul on July 22 under the auspices of President Recep Tayyip Erdoğan.