Wheat prices have surged to their highest level in two years due to the escalating attacks on Black Sea ports and shipping. This has sparked new concerns about food inflation, as one of world's major grain export routes is under threat.

Corn prices have also risen to their highest level in over a year. Traders warn that disruptions in grain flow from the Black Sea may increase food costs for producers and consumers around the world.

Black Sea grain exports are a major part of the global grain trade, with cargoes coming from Russia, Ukraine and other major grain producers. However, recent threats against vessels and ports have raised fears that the Black Sea could become a difficult route for exporters to get their crops to Africa, the Middle East, and Asia.

Commerzbank stated in a report that disruptions in the area have a direct effect on wheat prices.

The Chicago Board of Trade (CBOT), the most active wheat market, was up 1.1% to $7.03-3/4 per bushel at 1021 GMT. It had earlier reached a 2-year high of $7.11-1/4. This puts it on course for a gain of more than 20% this month.

BLACK SEA SHIPPING IS UNDER THREAT

The Ukrainian president Volodymyr Zelenskiy announced on Thursday that Russia would intensify its attacks on vessels in Black Sea. He accused Moscow of plans to undermine Ukraine’s grain corridor.

Security risks already affect businesses and shipping.

Allseeds, a Geneva-based producer of vegetable oil, announced that it would cease operations in the southern Odesa area of Ukraine due to the escalating Russian drone and missile attacks against port infrastructure and logistics.

Ukraine's Agriculture Minister also stated that some shipowners temporarily suspended arrivals in Black Sea ports for agricultural exports due to recent attacks on ports and merchant vessels.

While the attention was focused on the major crop producing regions, it was also important to keep an eye on the outlook for crops in those areas.

Hard red spring wheat yields in North Dakota were estimated at 48.0 bushels/acre by an annual 'crop tour,' slightly lower than last year, but above the 5-year average of 45.8.

EarthDaily analyzed satellite data and agronomic information to determine that mid-season conditions for Canadian farmers were the best in over a decade.

CORN AND SOYBEANS ALSO CLIMB

While soybeans rose?0.4% from $12.49 to $12.49 per bushel. They had previously touched $12.55, the highest price since May 2024.

Corn was also 0.4% higher, at $4.89-12 a bushel. It had previously reached $4.94, its highest level since April of last year.

The higher crude oil prices are supporting corn and soybean prices because more crops are being used to produce biofuels like ethanol and biodiesel. Rabobank, one of the world's largest soybean producers in Brazil, expects that the crop will fall by 2% to 178,000,000 metric tons from the previous record. The bank stated that market conditions may keep soybean plantings stable. (Reporting and editing by Jan Harvey; Additional reporting from Naveen Thkral in Singapore, and Sybille De La Hamaide in Paris)

(source: Reuters)