WASHINGTON (Pakistan Point News / Sputnik - 18th July, 2023) US wheat prices rallied for a third day in a row on Monday after Russia confirmed market speculation that it was ending its participation in the grain exports agreement, formally known as the Black Sea Initiative.
The most-active September wheat futures contract on the Chicago board of Trade had rallied a cumulative 5% since the close of Wednesday's trading as talk mounted that Russian President Vladimir Putin will pull his country out of the deal which he said has failed to meet its objective of providing grain supplies to some of the poorest countries.
"World rallied on word from President Putin of Russia that the grain deal for the Black Sea would not be extended as it is not in the interests of Russia to do so anymore," Jack Scoville, chief crop analyst at Chicago's price Futures Group, said.
Scoville pointed out the global wheat supplies were expected to tighten in the near-term, pushing prices even higher.
Uncertain world weather and Russia's political problems were behind the wheat rally since Thursday, Scoville said.
"Russian wheat exports are continuing as if nothing happened so far, but that could change down the road, too. Ukrainian Wheat exports through the Black Sea are almost none," he added.
The Black Sea Initiative was established after Russia, Ukraine, Turkey and the United Nations agreed to provide a humanitarian maritime corridor for ships with food and fertilizer exports from Ukrainian Black Sea ports on July 22, 2022.
Despite having since agreed to several extensions to the grain deal, which is now due to expire later on Monday, Moscow has been pointing out that the deal's component on the facilitation of Russian grain and fertilizer exports was not being fulfilled.
Earlier on Monday, Kremlin spokesman Dmitry Peskov said Russia's participation in the grain deal has been terminated with immediate effect, although it would return to it if commitments toward Moscow are fulfilled.
