Wheat prices spike and collapse on false reports of export ban

Global wheat futures rallied almost 5% after misinterpreted comments from a Ukrainian official on Facebook spread fears of an imminent export ban.

Deputy agriculture minister Maksym Martyniuk wrote of “export limits for wheat” in a Facebook post published Thursday afternoon, which the market interpreted to mean an export ban was on the cards.

However, the Ukrainian agriculture ministry typically agrees an annual export quota with the grain trade, giving guideline figures on the volumes that are permitted to be exported each marketing year.

Martyniuk did not give a figure on what the limit on export volumes will be, but said it is expected to be agreed “in the coming days.”

Wheat futures in Chicago rallied 4.7% in the wake of the post spreading around the market.

By 1800 Eastern Time – halfway through the trading day in Chicago – volumes on the September SRW were already at their second-highest of the contract’s life.

However, within two hours of the post appearing on Facebook, front month wheat futures had fallen as much as 5.8% from their highs.

Agricensus contacted the Ukrainian agriculture ministry for comment, but none had been received at the time of going to press.

The jump comes at a nervy time for the wheat market, with the industry watching cash prices rally around the world as hot, dry weather has damaged crops and threatened the global supply balance.

This is not the first time agriculture markets have reacted erratically to social media posts.

In May, soybean futures jumped and then fell 1.4% in two minutes after a post on Twitter mistakenly announced an end to the ongoing trade war between China and the US.