Escalating violence between Russia and Ukraine, and the shooting down of a Malaysian airliner yesterday over the border between the two countries by rebels is causing increased concern over Black Sea grain trade. Wheat surged by 15% in the first quarter of the year as tensions between Russia and Ukraine were building and planting season was beginning, but in the three months ending June 30, wheat fell 17% as drought conditions in the U.S. were easing and there were signs indicating that the turmoil in Eastern Europe was quieting. Wheat futures for September have seen their biggest jump since April 15, gaining 2.4% to reach $5.5075 on the Chicago Board of Trade. As of June 27, the U.S. Department of Agriculture (USDA) indicated that Ukraine’s grain shipments were exceeding those of last year, and world inventories of wheat will reach 189.54 million tons by May 2015. But as Russia is the world’s fifth biggest wheat exporter and Ukraine the ninth, the question is whether the escalating situation between the two countries will hinder the grain from reaching world markets.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free weekly enhanced eNews service