How much Black Sea wheat is at risk of disruption? Grain market daily

• UK feed wheat futures (May-25) closed yesterday at £190.50/t, up £0.35/t from Monday’s close. The Nov-25 contract closed at £188.75/t, up £1.65/t over the same period.
• Domestic futures followed both Chicago and Paris wheat futures yesterday, supported by a weakening of the US dollar which boosted exports. In Europe, exports were boosted following Trump’s announcement of a 25% tariff on imports from Canada and Mexico, as well as an additional 10% tariff on imports from China. Algeria's state grains agency, OAIC, issued an international tender to purchase 50 Kt of soft milling wheat from Europe.
• Paris rapeseed futures (May-25) closed yesterday at €502.75/t, down €6.50/t from Monday's close. Nov-25 futures closed at €461.00/t, down €4.25/t over the same period.
• European rapeseed followed Canadian canola down yesterday, following Trump's tariff plan. As a result, Winnipeg canola futures (Jan-25) declined by 2.14% compared to the previous day.

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Tensions in the Black Sea region escalated last week as Russia and Ukraine fired missiles at each other. Ukraine attacked Russia after the US lifted restrictions, and in response, Russia reportedly launched an intercontinental ballistic missile (ICBM) into Ukraine (LSEG).

As both countries are major players in the global wheat market, this development raised significant concerns about possible disruption to an already tight export outlook for the year. As a result, Chicago wheat futures (Dec-24) rose to a one-week high on Wednesday (20 November).  

While exports are projected to decrease this year, both countries will still contribute significantly to global wheat supply. Any further escalation of the conflict could put a large proportion of wheat at risk.   

What is the current export pace?

Despite the challenges, Russia and Ukraine have maintained a strong pace in their wheat export campaigns. This season-to-date (July-November), Russian wheat exports totalled 24.2 Mt, while Ukraine’s wheat exports reached 8.7 Mt over the same period. These figures represent year-on-year increases of 6% for Russia and a significant 58% for Ukraine.

How much wheat is at risk?

According to the USDA, Russia and Ukraine are expected to export a combined 64.0 Mt of wheat in the 2024/25 marketing year. This represents about 30% of the global wheat supply, projected at 214.67 Mt.  So far, both countries have exported a total of 32.9 Mt, leaving 31.1 Mt of wheat yet to be shipped.

Summary

Despite the ongoing conflict, both countries have maintained a steady wheat export pace, with prices returning to previous low levels due to the limited disruption. The global market still expects a large amount of wheat to be exported from both nations this year. However, any further escalation could potentially impact global wheat availability, leading to more market volatility.

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