Wheat futures tumble after Russia rejoins Black Sea grain corridor pact

Wheat futures plunged and market participants sighed with relief after Russia said that they will rejoin the Black Sea grains export corridor accord after pulling out of it this weekend after a reported drone attack on its fleet in Sevastopol.

“The only single reason I see wheat lower today is the Russia announcement. Nothing else suggests a bearish undertone.” senior grain and oilseed commodity analyst at Futures International Terry Reilly told Agricensus.

As of 1139 Eastern time, Chicago SRW December futures were down 6.3% on Tuesday's settlement at $8.45/bu, while March tumbled 6% at $8.64/bu.

Kansas City HRW December and March futures contracts both dropped 4.6% settlement to $9.44/bu and $9.41/bu, respectively.

Futures surged on Monday after Russia announced its withdrawal from the grain corridor agreement, which threatened to end grain shipments from deep-water ports in Ukraine, the world’s fifth-biggest wheat exporter prior to Russia’s invasion in February.

“Yesterday and the previous day speculative short covering as Chicago led wheat complex, today Chicago leads all lower. Headline trading 101,” Jeffrey McPike of McWheat Inc. told Agricensus. 

In Europe, the front-month December Euronext milling wheat futures contract, which is often known by its old name of Matif, traded at €339.75/mt, down €18/mt, while March decreased by €16.75/mt to €340/mt. 

Russia and Ukraine, which were wheat importers when they were part of the Soviet Union, have boosted production over the last 30 years and were responsible for more than 20% of global exports in 2021.

Corn futures in Chicago followed wheat lower, with December futures down by 1.8% to $6.85/bu and March down by 1.7% to $6.90/bu.