(Bloomberg) — Chicago wheat futures extended losses on Friday, on track for a weekly decline, as traders weighed the outlook for grain shipments from the Black Sea region.
Russian President Vladimir Putin on Thursday said his nation and Ukraine maintain contacts, even as he gave little sign that they’re making any progress on a peace deal. While a meaningful de-escalation remains elusive, traders took the remarks as an opportunity to sell wheat futures that had been trading at the highest levels since 2023 earlier in the week.
Adding to the pressure, Ukrainian President Volodymyr Zelenskyy said US President Donald Trump’s envoys Steve Witkoff and Jared Kushner will visit Moscow and then Ukraine in the coming days. Ukraine won’t conduct airstrikes for the period needed for the US visit and expects Russia to reciprocate, Zelenskyy said.
The most-active futures contract fell as much as 2.7%, following a sharp Thursday selloff. Prices are on track for a roughly 6% weekly decline, after soaring more than 10% in the last week of August.
Within hours of Putin’s comments on Thursday, Russian forces struck two vessels in the Black Sea, while Ukraine attacked a service ship involved in repair works at a key oil terminal in the region.
On Friday, a Russian drone struck the central headquarters of Security Service of Ukraine in central Kyiv, Zelenskyy said.
“The sharp decline in wheat futures appears to reflect the market initially removing part of the Black Sea geopolitical premium on expectations of potentially more constructive Russia–Ukraine negotiations,” analysts at STAG International wrote in a Friday note. “However, Putin’s latest comments provide limited evidence that the underlying geopolitical risk has materially improved.”
Buyers from Asia to the Middle East are scrambling for alternative grain supplies as continued fighting is keeping Black Sea shipments below normal levels and attacks have damaged ports and export terminals in one of the world’s most important grain trade routes. Prolonged constraints risk tightening global supplies and driving up food costs.
More stories like this are available on bloomberg.com
