Wheat Futures Hover Around 2-Month Lows

Wheat fell to $7.10 a bushel, their lowest level in two weeks, as traders weighed diplomatic efforts to end Russia’s war in Ukraine against continued disruption to Black Sea exports. Profit-taking following a strong rally also contributed to the decline. Prices had reached $7.70 on August 28, marking a three-and-a-half-year high, before easing. Ukraine struck targets at the Russian port of Novorossiysk, including a naval base and an oil-loading terminal, renewing concerns over disruptions to Black Sea trade. President Volodymyr Zelenskiy said the attack targeted several facilities, while traders cited unconfirmed reports that grain infrastructure may also have been damaged. However, attention shifted back to diplomacy after the Kremlin said it hoped US-mediated talks would resume soon and identified Abu Dhabi as its preferred venue for negotiations. The prospect of renewed talks helped ease some of the market’s supply concerns.

Wheat futures rose above $7.30 per bushel, rebounding from losses on September 4, as Washington’s renewed push to end the Russia-Ukraine war failed to deliver a meaningful breakthrough toward restoring Ukrainian and Russian grain exports. Over the weekend, US representatives met with Russian President Vladimir Putin in Moscow and Ukrainian President Volodymyr Zelenskyy in Kyiv. Putin reportedly ordered a three-day pause in Russian attacks on Kyiv to coincide with the US delegation’s visit to Ukraine, but stressed that the two sides had not agreed to a broader ceasefire. President Putin is reportedly determined to bring the entire Donetsk region under Russian control within six months, while Ukraine resumed strikes on Russian oil refineries on Monday. The intensifying conflict has disrupted grain trade, as attacks on Black Sea terminals and export infrastructure hamper agricultural exports.

Wheat fell below $7.20 per bushel, extending their retreat from a 3-1/2-year high of $7.67 on August 28, as traders assessed renewed diplomatic efforts to end the Russia-Ukraine war. US envoys held talks in Russia and Ukraine over the weekend, with discussions involving Ukrainian President Volodymyr Zelenskyy and senior European officials. The meetings raised hopes that a potential ceasefire could help restore disrupted Black Sea grain shipments, putting additional pressure on wheat prices. However, significant uncertainty remains, as repeated attacks by Russia and Ukraine on ports and commercial shipping sharply restricted grain exports from the region. Although wheat supplies remain available in the Black Sea, exporters continue to face difficulties moving cargoes to international markets. The disruption prompted Asian importers to seek alternative supplies, with trade sources reporting purchases of at least 500,000 metric tons of Australian and Argentine wheat in recent deals.