Wheat futures in Chicago fluctuated just below $7 a bushel as traders assess progress in negotiations to renew the Ukrainian grain export deal through the Black Sea, along with global supply prospects. 

The food staple traded at $6.9675 a bushel, about half the level a year ago when the price hit a record on a supply crunch after the Russian invasion of Ukraine. UN Secretary-General Antonio Guterres is set to meet with Ukrainian President Volodymyr Zelenskiy on Wednesday in Kyiv to discuss the continuation of the Black Sea agreement.

 A wave of Russian wheat cargoes has pushed down global prices in recent weeks to around the lowest level since September 2021. Still, the US winter wheat crop has been suffering from dry weather and shipments from Australia, currently the world’s second-biggest exporter, may tumble 20% in the next financial year as the climate turns drier after three wet years.

Eoin Treacy's view

The argument I was making a year ago was the only uncertainty was about Ukraine’s wheat crop. Russia’s was uninhibited because it has ample domestic supply of fertiliser. That suggested the panic about global food insecurity was unlikely to be systemic. As the war in Ukraine is concentrated in the eastern region, the rest of the country will have an interest in exporting this year either by rail or ship.



Wheat continues to trend lower and is likely to fully unwind the uptrend. Corn have rolled over, soybeans look likely to roll over and rough rice broke lower this week. Arabica coffee encountered resistance in the region of the MA last week and failed to rally this week.
The Invesco DB Agriculture Fund is susceptible to additional weakness as futures prices contract.