Wheat prices in Chicago rose on Wednesday after Russian drones reportedly hit a key Danube River grain port, in the latest attack aimed at Ukraine’s crop-export infrastructure.
The weapons struck the Ukrainian port of Reni on the Danube overnight and damaged a silo, Romanian media reported Wednesday, citing footage from people living close to the border only a few hundred meters away. That sent wheat prices as high as $6.31 a bushel, before paring gains.
Russia was targeting grain infrastructure, and storage suffered from the attack, Oleh Kiper, head of the military administration of the Odesa region, said earlier on Telegram, without naming the affected port.
Paris milling wheat also rose after two down days.
The escalation of hostilities in the breadbasket region could compound trade disruptions, after Russia pulled out of the Black Sea grain deal last month. That has made river channels — as well as rail and road routes — increasingly important to ferry Ukrainian crops abroad, with farmers in the midst of collecting this year’s harvests.
Strikes at Reni as well as other facilities on the Danube River will inevitably slow export paces out of Ukraine as well as Constanta, said Jacqueline Holland, an analyst at Farm Futures. “Ukraine has become increasingly dependent upon the Romanian Black Sea port of Constanta as Russians have constricted the country’s Black Sea grain shipments”, Holland said.
Russian drones also targeted ports on the Danube earlier this month, including Izmail. Such attacks risk hampering Ukraine’s trade potential for the longer-term.
The violence was condemned by Romanian Foreign Minister Luminita Odobescu, who accused Russia of “flagrant violations” of international law.
Wheat is still about 20% lower this year as harvests progress in the Northern Hemisphere, giving the global market an influx of fresh supply.
The US Department of Agriculture last week raised its estimate for Russian shipments in the 2023-24 season, and boosted its forecast for US wheat stocks by more than analysts had expected on average.
--With assistance from Volodymyr Verbyany.
(Updates quote on sixth paragraph)
Author: Keira Wright, Megan Durisin, Irina Vilcu and Tarso Veloso
