Wheat futures drop sharply after Kyiv and Moscow ink deal to restart grain exports
Wheat futures extended their recent declines after Russia and Ukraine penned an agreement to unblock exports of millions of tons of Ukrainian wheat through the latter's ports on the Black Sea.
As of 1741 BST, wheat futures on the Chicago Board of Trade for December delivery were falling 4.99% to $4.025 a bushel. December Oats futures were 3.74% lower at $4.3750 a bushel alongside.
The hope was that, if implemented, the deal would help to significantly bolster global food supplies.
"The deal on grain export could prove a welcome release for the food industry if it leads to lower grain prices with a knock on effect on flour and other vital ingredients," commented Mark Lynch at Oghma Partners.
"This would be welcome news given the unwavering and crippling pressure on input prices across the sector."
United Nations Secretary-General, Antonio Guterres, who brokered the deal together with Turkish President, Recep Tayyip Erdogan, described it as an "unprecedented agreement between two parties engaged in bloody conflict,
But tensions between the warring parties remained extremely high. According to Bloomberg, the Russian and Ukrainian representatives did not join Erdogan and Guterres at the head table for the offering remarks, instead inking separate agreements with Turkey and the UN.
Under the terms of the deal, exports would be allow through the Ukrainian ports of Odesa, Chornomorsk and Pivdennyi, which during the 2020-21 accounted for over half of Kiyv's exports.
The maritime corridor for shipments would be extended for three months but the deal could reportedly be extended should there be a need.