Wheat Gains After Ship Attack Temporarily Shut Russian Port
Comment of the Day

August 04 2023

Commentary by Eoin Treacy

Wheat Gains After Ship Attack Temporarily Shut Russian Port

This article from Bloomberg may be of interest. Here it is in full:

Wheat futures rose, paring a weekly loss, after a major Russian grain-shipping hub was temporarily closed. 

Traffic from Novorossiysk port was halted for several hours on Friday after a Ukrainian drone attack on a naval vessel. The overnight assault was repelled without damage to port facilities, according to the Russian Defense Ministry. 

Although the closure was short-lived, it adds to uncertainty about Black Sea trade flows as the war escalates in the midst of this year’s harvests. Russia is the world’s top wheat shipper, and its farmers are collecting a second bumper crop. 

Chicago futures climbed as much as 3.5%, before paring the advance. Prices have been increasingly volatile after Russia attacked Ukrainian sea and river ports following its withdrawal from the agreement to allow Ukrainian crop shipments through the Black Sea last month.

Eoin Treacy's view

Ukraine’s supporters and military donors fervently hope the country can continue to mount a stout defence, but they are cautious about the potential for escalation. However, the nature of war is tit-for-tat attacks that seek to deprive adversaries of the tools necessary to persist in resistance.

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