The price of wheat has gone up to its highest point in four months because of the recent uprising in Russia, which has made traders uncertain about grain shipments from the Black Sea region. Russia is a major exporter of wheat, so any changes in its shipments would have a big impact on global trade.
Although there haven't been immediate disruptions to wheat trade, the shipping industry is evaluating the safety of operations in the area. Chicago wheat futures initially rose by 1.3% in New York trading on Monday, reaching a high of 3.2% as traders considered the implications of the recent events. This increase in price is also influenced by dry weather affecting corn and soy crops in the United States.
However, the futures later fell, showing a loss of over 1%, and dropped an additional 1.8% on Tuesday. Over the weekend, there was an armed uprising in Russia led by Yevgeny Prigozhin, the leader of the Wagner mercenary group. They demanded the removal of President Vladimir Putin's army chiefs. A deal was eventually made to end the uprising, with Prigozhin agreeing to halt his assault and go into exile. This uprising posed the most significant threat to Putin's rule in nearly 25 years.
This situation could also impact the future of a grain shipment agreement between Ukraine and the Black Sea ports. The agreement is set to be renewed in mid-July, but Ukraine's infrastructure minister expressed pessimism about its extension. According to Mera, the political turmoil in Russia makes it less likely for them to have the time and willingness to negotiate the details of a new grain deal.
