Black Sea Disruptions Drive Wheat Prices Higher Again

The Black Sea wheat market is experiencing another rally due to ongoing disruptions in Russia and Ukraine. Chicago wheat prices rose 6% over the week, making it 14% higher than a month ago. This development comes after months of similar rallies caused by the same issues.

Exporters from both countries are struggling to move their grain through traditional routes, leading to increased reliance on alternative routes that are slower and more expensive. Russian ports can only handle around half of the normal Black Sea movements, while Ukraine's exports have dropped significantly since July.

In addition to wheat, European corn prices are also affected due to poor crop conditions in France. The European Commission has reduced EU maize production forecasts to 50.1 million tonnes, a 19-year low. This decrease means more wheat may need to stay within Europe for livestock feeding, further driving up prices.

Australian wheat prices have participated in the rally, although with varying degrees of success across different ports. The global futures market does not automatically translate to local prices, making it essential to consider regional supply and demand factors.