Wheat Prices Soar Again after Russian Missiles Strike Odesa Following Grain Deal

Wheat prices have skyrocketed again on Monday, shortly after Russian forces struck the southern Ukrainian port of Odesa.

The prices had finally fallen to pre-war levels late last week after Russia and Ukraine agreed on a deal to release the exports of wheat.

Chicago wheat futures surged as much as 4.6 percent, before dropping to trade 3.1 percent higher at $7.82 1/4 a bushel by 3:21 p.m. in Singapore.

Corn futures rose as much as 2.8 percent on Monday before seeing a decline in gains to 1.4 percent, while soybeans were up just 0.3 percent.

Wheat prices dropped almost 6 percent on Friday after Russia and Ukraine, both of whom are major exporters of grains, reached a deal to allow crucial grain shipments to safely leave three Black Sea ports: Odesa, Pivdennyi, and Chornomorsk.

Those prices have not been seen since before Russian President Vladimir Putin launched his “special military operation” in neighboring Ukraine in February.

The agreement was brokered by Turkey and hailed as a vital step toward helping to avert a global food crisis.

Representatives of Turkey, as well as Ukraine and Russia, met in Istanbul on Friday to sign the deal, along with U.N. General Secretary Antonio Guterres.

Turkish President Recep Tayyip Erdogan said of the deal on Friday: “We are proud of being instrumental in an initiative that will play a major role in the solution of the global food crisis that has occupied the whole world for a long time.”

The president also said the deal will “contribute to preventing the danger of hunger that awaits billions of people in the world.”

However, on Monday, Russia said that its cruise missiles had struck military infrastructure of Ukraine’s Odesa port over the weekend, shortly after the agreement was signed.

The strike used “Kalibr missiles” and destroyed Ukrainian military infrastructure, “sending a Ukrainian military boat to the Kiev regime’s favorite address in a precision strike,” Foreign Ministry spokeswoman Maria Zakharova said on Telegram on Sunday.

The “favorite address” was a reference to Ukrainian forces on Snake Island in the Black Sea who reportedly told a Russian ship to “go [explicit]” itself before a Russian strike in February.

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Serhii Bratchuk, a spokesman for the Odesa military administration, said on Telegram that Kalibr-type cruise missiles hit the infrastructure of the port and that two were shot down by Ukraine’s air defense forces.

“Two hit the port’s infrastructure facilities,” he wrote.

Natalia Humeniuk, a spokeswoman for the Ukrainian military’s southern command, said on TV the missiles did not hit grain storage at Odesa’s port.

An estimated 20 million tonnes of grain has been held up in the port of Odesa in southwestern Ukraine, according to the BBC.

Meanwhile, wheat futures rose by 70 percent to a record high of $12.94 per bushel in the two weeks after the invasion began, prompting concerns that the conflict could impact global supplies, worsen food insecurity and drive prices up further.

Wheat prices have gradually declined roughly 42 percent since reaching those initial highs.

Nevertheless, U.S. wheat futures are still 15 percent above where they were last year, while the Benchmark French milling wheat futures are 65 percent higher than this time last year, according to Business Insider.

The EU’s High Representative for Foreign Affairs Josep Borrell said on Saturday that the bloc “strongly condemns” the attack.

“Striking a target crucial for grain export a day after the signature of Istanbul agreements is particularly reprehensible & again demonstrates Russia’s total disregard for international law & commitments,” Borrell wrote on Twitter.

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By Nick R. Hamilton

Nick has a broad background in journalism, business, and technology. He covers news on cryptocurrency, traditional assets, and economic markets.

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