Wheat Rises as Black Sea Supply Risks Mount

Wheat hovered around $6.6 per bushel, the lowest in two months and more than 13% below the 3-1/2-year high of $7.67 reached on August 28, as rising Russian export volumes and expectations of a strong Australian harvest weighed on the market. Traders have largely overlooked renewed Black Sea shipping attacks, focusing instead on Russia’s growing use of Baltic ports after disruptions forced southern terminals to suspend much of their activity. Rusagrotrans expects Russian wheat exports to reach 3 million tonnes in October, while other analysts have also revised forecasts higher, reflecting the pace of shipments. Meanwhile, early crop assessments in Victoria suggest Australia could produce a substantially larger wheat harvest, potentially easing supply pressures for buyers in Southeast Asia and the Middle East. However, dry conditions are limiting yields in parts of northeastern Australia, and renewed Russian-Ukrainian attacks have clouded prospects for restoring Black Sea exports.

Wheat rose to around $6.62 per bushel in mid-October, rebounding from a two-month low hit on October 16 as renewed Ukraine-Russia tensions heightened concerns over global supplies. Over the weekend, Ukraine deployed more than 1,000 drones against Russian targets, setting an oil terminal ablaze in St. Petersburg following the US resumption of intelligence sharing with Kyiv. Russia responded with strikes on Ukraine’s energy sector, including oil and gas facilities, carrying out at least 76 attacks over the past 24 hours. The escalation has cast fresh doubt on the near-term prospects for wheat shipments through the Black Sea, raising concerns about potential supply disruptions. Ukrainian President Volodymyr Zelenskyy said Kyiv was in talks with Turkey, Egypt and India about establishing a Black Sea grain export corridor, although Russia currently opposes the proposal.

Wheat fell to around $6.65 per bushel, its lowest level since August 18, as early assessments pointed to a significantly larger Australian harvest. During a two-day crop tour, scouts from the Grain Industry Association of Victoria reported strong yields across the region, with only limited signs of water damage and disease. The prospect of increased Australian supplies could ease pressure on buyers in Southeast Asia and the Middle East as the escalating Black Sea conflict threatens grain shipments from two of the world’s largest wheat producers. Geopolitical risks remain elevated after Ukrainian President Volodymyr Zelenskyy ended a three-day pause in attacks on Russian oil refineries, citing continued Russian strikes on Ukrainian energy infrastructure and uncertainty over US support. The tour covered key growing areas, including Horsham and Ouyen in Victoria and Wagga Wagga in neighboring New South Wales, with findings expected within the coming week.