Wheat Nears 4-Month Highs

Wheat prices traded around $6.7 per bushel in mid-August, remaining at its highest level since July 24, as escalating tensions in the Black Sea continued to fuel concerns over global grain supplies. Russia rejected the prospect of a Black Sea ceasefire with Ukraine, saying it saw no basis for “half-measures” that would provide relief to its opponent. Russia and Ukraine have intensified attacks on commercial shipping in the Black Sea in recent weeks, disrupting trade flows and driving grain prices higher. Reflecting these risks, the US Department of Agriculture lowered its outlook for Russian and Ukrainian grain exports, cutting its forecast for Russia’s 2026/27 wheat exports to 46 million tonnes and Ukraine’s to 13.5 million tonnes. Additional support came from deteriorating crop conditions in the southern US Plains, where persistent dryness has raised concerns ahead of the planting season for the 2027 winter wheat crop, which is set to begin in roughly a month.

Wheat prices climbed more than 3% to around $6.70 a bushel on Friday, reaching a three-week high and bringing weekly gains to over 5%, the strongest performance since mid-July. The rally followed reports of a Ukrainian strike on a Russian Baltic port and Moscow’s rejection of a proposed Black Sea truce, reviving concerns over grain export disruptions. Ukraine’s military said it targeted a gas condensate processing facility at Ust-Luga, raising fresh worries about the security of Russia’s export infrastructure despite no reported damage to grain facilities. Earlier in the week, Ukrainian authorities had reportedly proposed halting attacks on civilian targets in the Black Sea, but Russia rejected the idea of a ceasefire. The risks are significant for global wheat supplies, as Russia and Ukraine are expected to account for nearly 30% of world wheat exports in the 2026/27 season.

Wheat prices climbed more than 2% to above $6.60 a bushel on Friday, bringing weekly gains to over 4%, the strongest performance since mid-July. The rally was driven by growing concerns over disruptions to Black Sea exports amid the Russia-Ukraine conflict. Russia and Ukraine remain critical to the global wheat market, together accounting for almost 30% of projected world wheat exports in the 2026/27 season, leaving prices particularly vulnerable to prolonged interruptions. Supply concerns intensified after Russia halted grain loadings at its main Black Sea and Azov Sea ports. Operations at all three major terminals in Novorossiysk have now been suspended following Ukrainian drone attacks earlier in the week. The disruptions could force Russia to reduce exports further this month, tightening global availability. However, there were signs of a possible diplomatic opening, with Ukraine reportedly proposing that both sides stop attacks on civilian targets in the Black Sea.