Ukraine's Drone Attack on Novorossiysk Raises Fears of Wheat Supply Disruption

Ukraine launched a massive drone attack on Russia's Black Sea port city of Novorossiysk, putting two major grain terminals out of action. The attack, which also damaged four enterprises and more than two dozen residential buildings, has raised fears in global markets of a disruption to wheat supplies.

Russia is the world's largest wheat exporter, with most of its exports shipped via its Black Sea ports like Novorossiysk. Ukrainian President Volodymyr Zelenskiy said that Ukraine had hit Russia's Novorossiysk naval base with drones, missiles, and unmanned boats.

The attack has caused an emergency situation to be declared in the city, with the Black Sea port's water supply suspended. Chicago wheat futures rose around 3% on Wednesday following reports of the Novorossiysk attack.

Ukraine has agreed not to target CPC oil shipments, according to a report by The Financial Times, which cited a request from US Vice President JD Vance in late July. However, it is unclear whether the CPC or tankers collecting oil from the pipeline were struck during the overnight attacks.