In June, wheat futures in the US experienced a significant surge, surpassing $6.8 per bushel, marking the highest level in two months. This rise was triggered by an announcement from Russian officials, stating that the trade corridor agreement facilitating Ukrainian grain exports would not be extended beyond its original deadline of July 17th.
The potential cessation of Ukrainian Black Sea grain exports poses a substantial risk of shortages for the usual participants in the Middle Eastern and African markets, as a vital supply source would be eliminated. Adding to these concerns, Ukrainian supplies have been further strained by the recent explosion at the Kakhovska hydroelectric dam. This unfortunate incident disrupted the water supply in crucial wheat-growing regions, exacerbating the prevailing drought conditions.
Meanwhile, dry weather conditions in the Midwest region of the US have also raised apprehensions about diminished yields, contradicting earlier predictions of a record-breaking supply within the country. On a positive note, Russia anticipates a bumper harvest, resulting in export forecasts nearing 60 million tonnes. Additionally, strong output is expected from the European Union and India.