Seeded fields during the sowing of the winter wheat on a farm in Flora village, Odesa Oblast, Ukraine, in September. Julia Kochetova/Bloomberg

Wheat closed at the highest price since June as traders considered a worsening Russia-Ukraine war against lackluster U.S. grain demand.

The futures climbed as much as 7.9% in Chicago, within cents of the daily exchange limit, before ultimately settling up 6.6% after explosions rocked the Ukrainian capital Kyiv. Russia has threatened further missile attacks.

The intensifying conflict calls into question whether the two sides will agree to extend a Ukraine grain-export deal that’s set to expire in about a month. The warring nations are critically important suppliers of wheat and other crops worldwide.

“We cannot rule out further food-security issues if any of the key world producers have production difficulties or the situation in the Black Sea region does not improve,” Hightower Report analysts said in a note to clients.

Any slowdown from the Black Sea could boost prices for global food staples, which had recently been retreating. There have already been challenges with Ukrainian crop shipments, as the backlog increases of outbound vessels awaiting inspection in Istanbul.

The most-active Chicago wheat contract pared its earlier advance to end the trading day at $9.38 a bushel, which still marks the priciest level since June 23. Corn settled up 2.2% at $6.9825, the highest since June 21, after jumping as much as 3.4%.


The ease in prices into the close came amid ongoing concern that an economic slump will curb global demand for grains and other farm products.

Russia appears to be “losing the war and could do something rash to try to hold things together,” Jack Scoville, vice president of Chicago brokerage Price Futures Group, wrote in a note to clients. At the same time, demand for U.S. Wheat “still needs to show up,” he said.

Furthermore, hot temperatures and dry conditions in big producing regions like the U.S., Europe, India and Argentina could put future wheat crops at risk.

In better news for crops, a logjam of more than 2,000 U.S. boats and barges is being cleared as two closures along the Mississippi River reopened on Sunday. Low water levels from prolonged drought had halted commercial shipments of commodities in the middle of the autumn harvest.

Traders are also awaiting a crucial crop report from the U.S. Department of Agriculture on Wednesday. Analysts surveyed, on average, expect the agency to cut its outlook for global wheat and corn stockpiles.

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