In Chicago, a bushel of wheat (about 27 kg) for September delivery fell 5.86% to $7.5900, returning to its price before Russia’s invasion of Ukraine on February 24.
Corn, which Ukraine also produces, fell 1.99% to $5.6425 a bushel for same-month delivery.
Ukraine and Russia ended up signing in Istanbul on Friday, with Turkey and the UN, a fiercely negotiated agreement which will establish “secure corridors” allowing the circulation of merchant ships in the Black Sea. Markets hope it will relieve countries dependent on the Russian and Ukrainian markets, which together account for 30% of world wheat trade.
“I hardly expected it given that the Russians are advancing further east and approaching the port of Odessa,” commented for AFP Michael Zuzolo, president of the brokerage and analysis company Global Commodity. Analytics and Consulting.
“It surprised me and the market reaction suggests that there was a wheat premium in the market, particularly in Europe and to a lesser extent in Chicago futures, until this news. falls,” he said.
On Euronext, common wheat concluded at 325.75 euros per tonne for delivery in September, plummeting by 6.41%.
Gautier Le Molgat, analyst at Agritel, however, recalled the uncertainties raised by the concrete implementation of these maritime corridors.
Michael Zuzolo also remained “skeptical”. “I don’t think I’m the only one who doubts that it moves a lot of grain given what we’ve been through over the last couple of months with the movement of grain by rail out of Ukrainian areas through Russian areas and then by ship to the Sea of Azov, then across the Black Sea to Turkey and North Africa”.
The analyst wondered if the price of the cereal, but also that of corn, would continue to fall, given the weakness of the dollar and the drought affecting crops in France, Romania and Spain.