Wheat futures drop as Ukraine readies to open Black Sea exports

Wheat futures traded in Chicago fell as Ukraine prepares to open two Black Sea corridors for grain exports.

Ukraine alerted ships that it is opening two maritime corridors to the seaports of Odesa and Chornomorsk, according to State Hydrographic Service of Ukraine chief dispatcher Oleksandr Kozaniuk.

“Whatever the wheat market is doing, it’s going up or down based off the latest news on Ukraine,” Jack Scoville, an analyst at Price Futures Group Inc. in Chicago, said over the phone. The situation will remain “dicey,” he said, but “they’ll probably get some stuff exported.”

Chicago wheat fell as much as 2.2% to $7.86 per bushel. Turkey said grain exports from Ukrainian ports could resume within a week and reach 25 million tons by year’s end after it brokered a deal between Kyiv and Moscow last week, though multiple issues remain. 

“The myriad of other challenges to be resolved before ships can load and leave Ukraine’s Black Sea ports is now becoming evident,” Tobin Gorey, agricultural strategist at Commonwealth Bank of Australia, wrote in a note. “We expect the trade will overcome most of those challenges in time.”

Now that the export deal has been signed, all eyes are on clearing a major obstacle: as many as 100 vessels carrying grain and agricultural products were trapped in Ukrainian ports when Russia’s invasion began, and seeing them sail would mark a key step toward revitalizing seaborne trade. Still, freight for new sales is hard to nail down, with risks to insurers and shippers lingering.

Day one of the US spring wheat crop tour also reported “very good yields” for southern and eastern areas of North Dakota, Terry Reilly, senior commodity analyst at Futures International LLC in Chicago, said in a note.

In other grains, corn fell and soy rose.