Russia Leaving A Black Sea Export Pact Raises Wheat Prices 5.5%

Wheat futures in Chicago surged by more than 5% on Monday, while corn futures increased by more than 2%, as Russia's withdrawal from a Black Sea export accord fueled fears about global grain supplies.

As of 01:02 GMT, the most-active wheat contract on the Chicago Board of Trade (CBOT) climbed 5.5% to $8.75 per bushel, after reaching a high of $8.93 per bushel earlier.

Corn climbed 2.2% to $6.96-1/4 per bushel, while soybeans increased 1% to $14.13-1/2 per bushel.

"Russia's suspension of participation in the Black Sea grain corridor over the weekend may overwhelm (the market) in early trade today," said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia (OTC:CMWAY) (OTC:CMWAY).

Our assessment was that wheat futures added a little premium to prices for the risk that the corridor may close.

Moscow suspended its participation in the Black Sea accord on Saturday, alleging a large Ukrainian drone strike on its ship in Russia-annexed Crimea.

Washington alleged that Russia was weaponizing food, while Kyiv stated that Russia was creating a rationale for a planned exit from the accord.

On Monday, the United Nations, Turkey, and Ukraine stated that a transit agreement for 16 ships will be in place for the grains export pact.

As two of the world's major wheat producers, Russia and Ukraine's invasion of Ukraine, which has lasted eight months, has affected grain prices.

In March, wheat futures reached a record high of $13.64 a bushel.