Wheat slips as Black Sea risks persist

Chicago wheat futures edged lower on Tuesday but retained most of the previous session’s gains as escalating attacks on ships and port infrastructure kept the market focused on possible disruption to Black Sea grain exports.

The most-active wheat contract on the Chicago Board of Trade was trading near $6.50 a bushel during Asian hours, easing slightly after rising sharply on Monday. Corn futures advanced, while soybeans traded close to unchanged as investors assessed crop weather across the United States.

Wheat prices have gained more than 7% over the past month, reflecting growing concern about the reliability of shipments from Russia and Ukraine. Both countries rank among the world’s leading grain exporters, making the Black Sea a critical supply route for import-dependent markets across the Middle East, Africa and Asia.

Fighting has intensified around maritime infrastructure during the northern hemisphere harvest season. Attacks have damaged vessels, export terminals and logistics facilities, while restrictions on ship movements have delayed cargo handling and increased insurance and freight costs.

Three major Russian export terminals at Novorossiysk and Taman have restricted grain deliveries by truck because of heightened security risks. The facilities have a combined annual shipping capacity exceeding 20 million tonnes and form an important part of Russia’s seaborne grain trade.

Night-time vessel movements have also been limited at Novorossiysk, encouraging exporters to examine alternative routes through Baltic ports. Such diversions could keep grain flowing but would increase transport distances and costs, reducing the competitiveness of Russian wheat in international tenders.

Ukraine’s export network is facing similar pressure. Missile and drone attacks have reduced grain-handling capacity at ports around Odesa, where most of the country’s agricultural exports are loaded. Available monthly capacity has fallen from about six million tonnes to four million tonnes, while several terminals have suspended purchases or curtailed operations.

The disruption has arrived as newly harvested wheat is moving towards ports. Storage bottlenecks could worsen if shipments slow further, forcing traders to redirect grain towards railways, roads and river terminals. Those alternatives generally carry smaller volumes and higher costs than deep-water Black Sea ports.

Russia is expected to remain the world’s largest wheat exporter in the 2026-27 season. Production forecasts point to a crop of about 88 million tonnes, supported by favourable yields in several growing regions. Ukraine’s harvest has been projected near 23.5 million tonnes.

Large expected crops have limited the scale of the wheat rally. Global supplies remain sufficient on paper, and competitive offers from Russia have continued to weigh on prices. Traders, however, are placing a larger risk premium on grain that may be physically difficult to move from farms to ships.

The United States faces a tighter domestic wheat outlook. Production has been estimated at roughly 1.54 billion bushels, the lowest level in more than five decades, after unfavourable growing conditions affected several regions. Lower output has strengthened the importance of export demand and overseas supply disruptions for Chicago prices.

Corn futures rose as traders balanced Black Sea concerns with generally favourable conditions across the US Midwest. Weather forecasts have pointed to rainfall in key production areas, supporting expectations for strong yields. The crop is approaching important development stages when heat and moisture can significantly affect output.

Soybean prices were steady as investors monitored rainfall during the pod-setting period. Adequate moisture could improve yield prospects, although high temperatures or extended dry spells would quickly alter expectations for the harvest.

Black Sea developments remain the dominant influence in wheat trading. Russia and Ukraine together account for a substantial share of internationally traded wheat, and importers have limited capacity to replace a prolonged loss of supplies from the region without paying higher prices.

Food-importing countries are particularly exposed because many purchase Russian and Ukrainian wheat for bread programmes and subsidised food systems. Higher shipping expenses or cargo delays could lift government import bills even if benchmark futures remain below the peaks reached after the invasion of Ukraine in 2022.