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Russia, Ukraine, the United Nations and Turkey signed the deal
on Friday to reopen three Ukrainian Black Sea ports for grain
exports. The deal is valid for 120 days and targets monthly
exports of 5 million tonnes.
Wheat futures on the Chicago Board of Trade rose nearly 4% to
$7.86 a bushel on Monday, regaining much of the ground lost on
Friday as prices fell nearly 6% after the pact was announced.
"A restart of Ukrainian exports will not only need a safe
shipping channel, but also safe ports. The Russians have created
doubt about the safety of ports hardly before the ink was dry on
the shipping agreement. Doubt is there again," one European
trader said.
Ukraine's sea ports have been closed since Russia's invasion in
February and while some crops have left by rail or road via
neighbours such as Romania and Poland, millions of tonnes have
piled up on farms.
The decline in shipments from one of the world's biggest grain
exporters has helped to fuel food inflation across the globe and
U.N. agencies have warned it could lead to starvation and mass
migration on an unprecedented scale.
"Along with the uncertainty about how long it will take to clear
the mines, ship owners will simply not sail to Ukraine, no
matter what the freight rate is, if they think their ship will
be hit by missiles," another European grain trader said.
"Ukraine needs high-volume ocean ship exports to clear its
storage for the new crop; the land and river exports to east
Europe are not enough."
Ukraine pressed ahead on Sunday with efforts to restart grain
exports from its Black Sea ports under the new deal but warned
that deliveries would suffer if a Russian missile strike on
Odesa was a sign of more to come.
"Even if they say they are still working on resuming exports, I
don't see who will want to insure ships that would go in that
zone," a third European trader said.
The Kremlin said on Monday that the missile strike would not
affect the export of grain.
In a conference call with reporters, Kremlin spokesman Dmitry
Peskov said Russia had targeted military infrastructure.
Chicago corn futures rose 2% to $5.75-3/4 a bushel while
soybeans were 0.9% up at $13.28 a bushel.
(Additional reporting by Naveen Thukral in Singapore, Michael
Hogan in Hamburg and Sybille de La Hamaide in Paris; Editing by
David Goodman)
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