Global Wheat Market Softens as Black Sea Logistics Remain a Concern

The global wheat market is experiencing a softening trend after a sharp rally last week. Futures are giving back some of their gains as reports indicate that Turkey is working on a possible new Black Sea grain corridor, encouraging profit taking.

Black Sea logistics remain the main driving news story in wheat markets, with Russia attempting to redirect grain toward Baltic and land routes due to constrained shipping capacity. Ukraine's reliance on Danube and western export corridors has increased, leading to congestion around Danube ports and a 60% drop in August grain exports compared to last month.

The global wheat balance remains relatively supportive, with world production near 817 MMT against consumption of around 826 MMT, implying another inventory drawdown. Major exporters' stocks are expected to decline year-over-year, making supplies available to the international market tighter and more concentrated.