|
SE Washington | Via a local elevator, https://www.nwgrgr.com/
If you look at the market, you'll see things turn a sharp and volatile turn this morning. Crude oil gains relatively limited on all the news, but wheat is leading a huge charge on grain futures. Why is wheat reacting so adamantly asks the readers voice in my head? Well, the primary driver was reports that the Sea of Azov, including the Kerch Strait, was closed to commodity movement, basically regenerating concerns similar to those seen when Russia first invaded Ukraine in. That region is strategically important because roughly 10% of Russia’s crude exports and 30% to 35% of its wheat exports move through the Kerch Strait and Sea of Azov, with Russia expected to account for more than 22% of global wheat exports this year. I wasn't glued to my computer back when Russia/Ukraine first took off because I was too busy funneling out stuffed barges and pushing 300+ trucks a day through one of our ports (yes, I hold multiple company records, thanks for asking) but even I am having market flashbacks this morning. Back to the news though. The aforementioned closure follows intensified Ukrainian drone activity targeting Russian fuel logistics, with reports that 35 of 120 Russian ships operating in the region have been hit, many believed to be carrying fuel to Crimea or tied to Russia’s shadow oil fleet. These developments add to recent refinery attacks that have reportedly shifted Russia from a major diesel exporter to a fuel importer, raising market fears that Russia may retaliate by escalating attacks on Ukrainian grain shipments and port infrastructure. Thus, the wheat futures spike. Big question is the lack of crude oil volatility right now given the implications, but wheat action significantly more aligned with a typical reaction given the market share of global wheat production and exports each party represents. We've been saying for months, if not years now, the market is numb to hollow Black Sea headlines, it would take significant infrastructural and logistical damage to impact market sentiment in the same fashion as the early 2020's.... Well, that's what happened. Meanwhile, outside of that ordeal we've still got tensions in the Middle East after additional reported US strikes on Iran, leaving hundreds of ships anchored in the Persian Gulf as many avoid the Strait of Hormuz. Although some vessels continue to pass through, Iran is pressuring ships to travel near its coastline, potentially to control passage or impose tolls, while the US is urging traffic along Oman’s coast. Oman has opposed any fees for using the strait, but Iran’s pressure appears to be influencing shipping behavior, with Reuters reporting that 22 Japan-linked vessels recently exited the Persian Gulf after other ships were struck near Oman. Like I said, you're going to read this maybe an hour or even two after I write it so new info might be available... I'm doing my best people.
Edited by slewis 7/10/2026 14:16
| |
|
Wheat prices