On Wednesday, wheat prices rose when Russia stated a withdrawal from a deal that enables grains to be exported across the Black Sea.
Wheat futures for September delivery went up by 1.12% to $676.75 per metric ton on July 19’s Asian afternoon session.
The decision of Russia to end a vital wartime deal increased fears regarding food security around the globe. Analysts say the movement is considered an inevitable setback and a harsh blow to markets.
On Monday, Russia announced that it refuses to renew the Black Sea Grain initiative hours before its expiry.
Based on the news, wheat, corn, and soybean prices increased. Wheat contracts rose by 3.00% on July 17, hitting 689.25 cents a bushel. Its highest price level for contracts on June 28 reached 706.25 cents.
However, the grain’s value remained under the record levels of 1,177.50 cents a bushel last May.
Specialists said Russia’s withdrawal mirrors a coup de grace on its last hopes. They added that UN shipping data showed that shipments had been consistently dropping.
Analysts said what matters is whether or not Russia decides to weaponize its wheat exports. During the past and current harvest periods, Moscow was the largest supplier globally, which exported 45 million metric tons.
Chinese Wheat Output Falls amid Rain Damages
Due to heavy rains, summer wheat outputs in China declined by 0.90% this year, according to data on Saturday. The crop experienced its first drop in seven years as growing areas were negatively affected before the harvest.
The National Bureau of Statistics reported that the volumes from the top wheat grower decreased to 134.53 million metric tons. However, it added that this period would still bring a bumper harvest.
Moreover, output drops are expected to create at least slight impacts on China’s state stocks. Global wheat markets watch dry weather patterns in significant exporters like Canada and the US.
Additionally, the crop’s decline was primarily led by weeks of heavy rains that damaged mature wheat in the Henan province.
