Business Maverick: Wheat soars after Russia exits pact allowing Ukraine exports

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Wheat futures surged after Russia pulled out of an agreement to allow grain exports from Ukraine through the Black Sea, a deal seen as critical for easing tight world supplies and controlling global food costs.

Russia suspended the deal after drone strikes against its naval fleet on Saturday, claiming without evidence that one of the drones might have come from a grain ship that’s part of the Black Sea initiative.

Turkey and the United Nations were working to salvage the agreement, even as Russia said any future steps could only be determined after a full investigation into the attack on its naval fleet. The two parties, alongside Ukraine, agreed to have vessels carrying food from Ukrainian ports“The UN, along with Ukraine and Turkey will continue the grain deal despite Russia pulling out,” said Joe Davis, director of commodity sales at Chicago-based brokerage Futures International LLC.

The grain corridor has eased tight world supplies since opening three months ago. Ukraine has shipped more than 9 million tons of grains and other foodstuffs, and prices for corn and wheat have retreated from the highs seen earlier in the year. The deal is set to expire on 19 November, and Moscow officials had already cast doubt on whether they would extend their participation.

 

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