Russian attack on Ukrainian Danube Port sends wheat higher

Russian drones reportedly hit a key Danube River grain port, sending wheat prices higher, in the latest attack aimed at Ukraine’s crop-export infrastructure.

The weapons struck the Ukrainian port of Reni on the Danube overnight and damaged a silo, Romanian media reported Wednesday, citing footage from people living close to the border only a few hundred meters away.

Russia was targeting grain infrastructure, and storage suffered from the attack, Oleh Kiper, head of the military administration of the Odesa region, said earlier on Telegram, without naming the affected port.

Wheat futures in Chicago rose as much as 1.4%, rebounding from the lowest since early June. Paris milling wheat also rose for the first time in three sessions.

The escalation of hostilities in the breadbasket region could compound trade disruptions, after Russia pulled out of the Black Sea grain deal last month. That has made river channels — as well as rail and road routes — increasingly important to ferry Ukrainian crops abroad, with farmers in the midst of collecting this year’s harvests. 

Russian drones also targeted ports on the Danube earlier this month, including Izmail. Such attacks risk hampering Ukraine’s trade potential for the longer term.

The violence was condemned by Romanian Foreign Minister Luminita Odobescu, who accused Russia of “flagrant violations” of international law.

Wheat is still about 20% lower this year as harvests progress in the Northern Hemisphere, giving the global market an influx of fresh supply. 

The US Department of Agriculture last week raised its estimate for Russian shipments in the 2023-24 season and boosted its forecast for US wheat stocks by more than analysts had expected on average.