PARIS, July 24 (Reuters) – Increasing attacks on shipping and ports in the Black Sea have caused wheat prices to rise to their highest level in two years. This situation raises new concerns about food inflation as one of the world's key grain export routes faces renewed threats.
Prices for soybeans have also reached a two-year high due to a surge in crude oil prices, while corn prices have increased to their highest level in over a year. Traders warn that disruptions in grain shipments from the Black Sea could lead to higher costs for food producers and consumers around the globe.
The Black Sea is a vital shipping route for grain, transporting goods from major producers like Russia and Ukraine. Recent threats to ships and port facilities are causing anxiety that exporters may find it difficult to transport crops to buyers in Africa, the Middle East, and Asia.
According to Commerzbank, "Since these two countries account for nearly one-third of global wheat exports, any disruptions in the region will have a direct effect on wheat prices."
The most active wheat contract on the Chicago Board of Trade (CBOT) rose by 1.1% to $7.03-3/4 a bushel as of 1021 GMT, after hitting a two-year high of $7.11-1/4 earlier, marking a potential increase of over 20% for the month.
BLACK SEA SHIPPING UNDER THREAT
On Thursday, Ukrainian President Volodymyr Zelenskiy stated that Russia would intensify its attacks on ships in the Black Sea, accusing Moscow of trying to weaken Ukraine's grain corridor.
These security concerns are already affecting businesses and shipping operations.
Allseeds, a vegetable oil producer based in Geneva, announced it would stop operations in Ukraine's southern Odesa region due to increasing Russian missile and drone strikes on port and logistics infrastructure.
Ukraine's agriculture minister mentioned that some shipowners have temporarily halted arrivals at Black Sea ports used for agricultural exports following a rise in attacks on ports and merchant vessels.
At the same time, focus remains on the crop outlook in major producing areas.
In North Dakota, an annual crop tour estimated yields for hard red spring wheat at 48.0 bushels per acre, which is slightly below last year's yield of 49.0 but above the five-year average of 45.8.
In Canada, research analyzing annual satellite and agricultural data showed that farmers are experiencing the best mid-season crop conditions in a decade.
CORN AND SOYBEANS ALSO CLIMB
Soybean prices increased by 0.4% to $12.49 a bushel after reaching $12.55, the highest price since May 2024.
Corn prices also rose by 0.4%, reaching $4.89-1/2 a bushel after peaking at $4.94 earlier, marking its highest price since last April.
The rise in soybean and corn prices has been supported by higher crude oil values, as crops are increasingly used to produce biofuels like ethanol and biodiesel.
In Brazil, one of the world's largest soybean producers, Rabobank predicts that the 2026/27 soybean crop will decrease by 2% from the previous record harvest, totaling 178 million metric tons. The bank noted that challenging market conditions might keep the area planted with soybeans mostly stable.
(Reporting by Sybille de La Hamaide in Paris; Additional reporting by Naveen Thukral in Singapore; Editing by Jan Harvey)