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GRAINS-Wheat increases by around 3% following Ukraine's attack on Russia's key export port

Chicago wheat futures rose around 3% Wednesday, after Ukraine attacked grain terminals at the main Russian wheat exporting port of Novorossiysk. This sparked fears that supplies would be disrupted to global markets.

Soybeans, corn and other grains rose in advance of a U.S. Agriculture report on world supply/demand later Wednesday.

Chicago Board of Trade?most active wheat increased 3.05% at $9.49-1/2 per bushel by 0929 GMT. Soybeans increased 0.3% to $11.73-1/4 bushels, while corn rose by 0.7% to $4.63-3/4 bushels. Industry sources said that two of Russia's largest grain terminals at the Black Sea port Novorossiysk have suspended operations as a result of the drone strikes overnight by Ukraine.

Most of Russia's wheat exports are shipped via Black Sea ports, including Novorossiysk. During the war between Ukraine and Russia, Ukraine left the massive grain export terminals at Novorossiysk largely alone. However, both sides have intensified their attacks on ports and shipping in recent weeks, effectively stopping Ukraine’s high-volume shipborne grains exports.

One European trader stated that "big grain export terminals can be easily hit and there is a fear that Ukrainian attacks on Novorossiysk will seriously reduce Russia's exports of wheat, which may cause demand to shift to other origins." The 'big question' is how long Ukrainian attacks will continue. Cargo vessel owners may stop sailing if they fear that their ships won't be safe in a conflict zone. Another trader said: "The market has become dependent on cheap wheat from Russia and Ukraine. High-volume shipments are moving out despite the war." Fears are now being raised that Russian wheat exports may be affected by the war. Grain markets have turned their attention to the U.S. Department of Agriculture’s August'supply and demand' report. This report will include estimates of the U.S. soybean and corn harvests for this year. Michael Hogan reported from Hamburg; Naveen Thupkral contributed additional reporting in Singapore. Subhranshu Sahu and Harikrishnan Nair edited the article.

(source: Reuters)