Wheat headed for the worst run of quarterly losses in 14 years as bumper harvests in parts of the Northern Hemisphere offset ongoing tension in the Black Sea after the collapse of a grain agreement.
Futures in Chicago have lost around 11% over the past three months and are poised for a fourth quarterly decline. While Moscow exited a safe-passage deal in July that allowed Ukraine to export its grain, plentiful supplies have kept a lid on prices. Russia was one of the countries to record a bumper harvest.
“What the events around the start of the Ukraine conflict showed is that in this day and age, the world by and large has a way of getting grain to the people who need it,” said Michael Whitehead, the head of agribusiness insights at ANZ Group Holdings Ltd. “This may be the new, low price level for wheat.”
Since the collapse of the grain deal, Ukraine has taken to using other export routes such as the Danube River, which has been repeatedly targeted by Russia in recent months. Ships have also started to return to Kyiv’s Black Sea ports, but it’s too early to know if efforts to reopen a corridor will boost shipments.
Keira Wright/Bloomberg