Ukraine grain deal talks set as Russia threatens to exit pact

Wheat held near a two-year low as officials from the Black Sea region agreed to negotiate the continuation of the Ukraine grain deal, before a looming Russian deadline for leaving the pact.

The deputy defense ministers of Turkey, Russia and Ukraine are due for talks Friday to discuss the extension of the Black Sea crop-export corridor, according to Turkish media reports. Russia will hold talks with United Nations representatives in Moscow on the same date, the Foreign Ministry said, according to Tass.

The deal has ensured the safe shipment of nearly 30 million tons of Ukrainian crops since it was signed in July, easing global food prices. However, Russia has warned it may withdraw from the pact in mid-May, if demands to boost its own food and fertilizer exports aren’t met. 

The warning has had little bearing on benchmark grain futures, with prices under pressure from ample supplies elsewhere and strong harvest prospects for next season. Still, further trade tumult could shift sentiment.

“Our hope is that the grain agreement will continue without any hitches,” said Turkish Defense Minister Hulusi Akar. “This agreement is very important for the peace and stability of the region, as well as for the countries in need.” 

Flows could end May 18 without an agreement, Ibrahim Kalin, a spokesman for Turkish President Recep Tayyip Erdogan, told reporters in Ankara on Wednesday. The outcome of Turkey’s presidential election on May 14 could also play a role in the continuation of the deal, if Erdogan — an ally of Russian President Vladimir Putin — loses his seat. 

Inspections of Ukrainian crop vessels have been repeatedly halted in recent weeks, disrupting trade and highlighting the fissures between the parties. Countries in eastern Europe have also blocked imports of some key crops from Ukraine as local prices plummet. 

Chicago wheat futures on Wednesday fell as much as 0.9% to $6.0375 a bushel, a two-year low. Corn traded near a nine-month low.