Attacks on Ukrainian grain stores shock cereals markets

Wheat markets are fairly bullish in the short term, with damage to Ukrainian grain infrastructure, reduced yields in the EU and poorer crop conditions in the US all supporting prices.

Chicago, Paris and UK wheat futures have all made gains during the past week.

UK feed wheat futures opened at £214/t on 26 July for the November contract, up £11/t on week-earlier levels.

See also: Wheat markets surge after Russia attacks grain terminals

Russian attacks on grain terminals at ports in Odesa and on the Danube River in Ukraine have shocked global markets and caused prices to rally.

UN secretary-general Antonio Guterres said: “The Russian Federation and Ukraine are both essential to global food security. They have historically accounted for roughly 30% of global wheat and barley exports, one-fifth of all maize and more than half of all sunflower oil.”

More emphasis is now on Ukrainian exports over land through Europe, and EU agriculture ministers met in Brussels on Tuesday 25 July to discuss how grain could be transported to global markets without flooding the domestic markets.

However, some eastern European countries want to extend the existing restrictions on grain from Ukraine which are due to expire in mid-September.

Grain trader Cefetra said UK wheat is struggling to compete for export with French and German wheat in northern Europe and Black Sea wheat in southern Europe.

Crop conditions

Crops on the Continent are being affected by drier weather in regions of western, central and northern Europe.

The EU Monitoring Agricultural Resources report has reduced its forecast yields, but output is still expected to remain at or slightly above the five-year average for most crops.

In contrast, other regions of Europe have had a rainfall surplus, which has delayed harvest and affected grain quality in Bulgaria, Romania, Slovenia, Croatia and Hungary, according to the report.

USDA figures showed crop conditions in the US were back slightly, with 68% of winter wheat harvested by 23 July, eight percentage points behind last year.


Forecast yields for feed barley in the EU have also been reduced in the latest Mars report.

Grain trader ADM said barley had maintained good value later in the season and was being supported by a lack of origination and tighter supply and demand on the year.

Spot prices collected by Farmers Weekly on 26 July averaged £160/t for feed barley, closing the gap to feed wheat to £28/t.