Wheat prices tumbled Friday, retreating to levels last seen prior to the Russian invasion of Ukraine following a landmark agreement to unblock Ukraine’s Black Sea grain exports.
In Chicago, the price of wheat for delivery in September dropped 5.9 percent to $7.59 per bushel, which is equivalent to about 27 kilograms and the lowest close since Russia invaded its neighbor on February 24.
On Euronext, wheat prices for delivery in September fell 6.4 percent to $325.75 per ton.
Friday’s agreement between Kyiv and Moscow — through United Nations and Turkish mediation — establishes safe corridors along which Ukrainian ships can come in and out of three designated Black Sea ports in and around Odessa.
Russia and Ukraine together produce about 30 percent of the world’s wheat exports.
Up to 25 million tons of wheat and other grain have been blocked in Ukrainian ports by Russian warships and landmines Kyiv has laid to avert a feared amphibious assault.
Despite Friday’s retreat in wheat prices, analysts expressed skepticism about the accord’s ability to sidestep the realities of the grinding Russia-Ukraine conflict amid doubts over Moscow’s willingness to implement the deal.
“I’m still skeptical and I don’t think I’m alone in that in questioning that it will actually move much grain,” said Michael Zuzolo, president of Global Commodity Analytics & Consulting.
But Zuzolo said wheat prices may not have much further to fall, given that drought conditions are hitting output in some other parts of Europe.