Wheat Market Falls as Black Sea Supply Hopes Grow

Wheat fell to around $7 a bushel, the lowest since August 25, and more than 8% below the 3-1/2-year high of $7.67 reached on August 28, amidst diplomatic efforts to restore grain shipments from the Black Sea. Ukrainian President Volodymyr Zelenskiy said India, Turkey, Egypt and other Middle Eastern countries were involved in discussions on reopening shipping routes, while Turkey has presented Moscow with proposals on maritime security. A ceasefire could allow Russia to rapidly restore as much as 80% of its Black Sea grain-terminal capacity. Ukraine’s grain inventories stood at 24.6 million metric tons on September 1, up 10 million tons from a year earlier, although attacks on ports and vessels continue to hamper exports. Importers in Asia, the Middle East and Africa have increasingly sought alternative supplies. France recently shipped 60,000 tons of wheat to Yemen, while Argentine export commitments have reached their highest level in five years for this point in the season.

Wheat fell below $7 per bushel in late September, remaining near its lowest level since August 25 as traders assessed fresh details of the US-China trade agreement, including tariff reductions on agricultural products. Both countries announced plans to lower tariffs on roughly $30 billion worth of imports from each side, covering a broad range of American farm goods including wheat. The two sides also agreed to establish an agricultural working group to facilitate future negotiations and improve market access. Still, traders are awaiting tangible signs of broader Chinese purchases, as progress has been limited on a separate pledge made during the Trump-Xi summit in May to buy an additional $17 billion worth of US agricultural products. Elsewhere, traders continued to monitor Black Sea export flows after Ukrainian President Volodymyr Zelenskiy stated that India, Turkey, Egypt and other Middle Eastern countries were involved in efforts to restore safe shipping through the Black Sea.

Wheat fell to $7 per bushel, hitting its lowest level since August 25, as traders awaited significant breakthroughs in agricultural trade talks between the US and China amid their summit in Washington. Earlier Thursday, US President Donald Trump said the two leaders had made “tremendous strides” toward improving US access to the Chinese market through the newly created Board of Trade. However, the lack of specific details disappointed some market participants. Traders expect Chinese purchases of US crops, including wheat, to increase if tariffs are removed, as both countries have discussed reducing tariffs on certain goods, including US agricultural and energy products. Meanwhile, investors are also focused on renewed diplomatic talks between Ukraine and Russia, with hopes of restoring grain exports through the Black Sea.