US Navy/Courtesy of Ukrainian Navy
- Wheat prices on Wednesday were on track for their biggest one-day gain since February 2022.
- On Tuesday, Russia launched missiles at the port of Odesa, one of Ukraine's key grain-exporting hubs.
- Russia this week also backed out of a deal that had ensured safe passage for Ukraine exports in the Black Sea.
Wheat prices turned sharply higher Wednesday following Russia's attack in the port of Odesa and Moscow's decision to back out of a key trade agreement that had allowed Ukraine exports safe passage in the Black Sea.
The missile bombardment targeted critical Ukrainian grain facilities, and wheat prices, while still below last year's record highs, are on pace for their steepest one-day gain since February 2022, when Vladimir Putin first ordered his "special military operation."
In Chicago, soft-red winter wheat futures added about 8% to trade at $7.25 a bushel, while hard-red wheat jumped 5.2% to hit $8.70 a bushel.
The Wall Street Journal reported earlier this week that the Kremlin will only rejoin the Black Sea export agreement if certain demands were met. Moscow had threatened to pull the plug on the deal multiple times before, but now wants the West to step in and facilitate food and fertilizer exports amid sanctions.
The initial agreement, which Russia, Ukraine, and Turkey hammered out last July, permitted Ukrainian exporters to ship corn, wheat, and other goods from three ports around Odesa.
Now, last year's fears are swirling once again that global food security could be at risk, as Ukraine boasts some of the most important trade routes in the world for wheat and other grains. The now-suspended deal allowed Ukraine to export more than 32 million tons of food.
Ukrainian President Volodymyr Zelenskyy said Monday, per the Journal, that the nation was ready to uphold the deal as best as possible without Russia's participation.
As for Russia, Putin has driven its economy into the ground over the last 16 months. It's been barred from major trade partnerships, hamstrung by embargoes, and dethroned from its role as a top global energy exporter.
Even as the Kremlin attempts to mask its economic troubles, a closer look under the hood suggests a crumbling empire.
"Many people still don't realize how bad the situation in Russia might be," Volodymyr Lugovskyy, an economics professor at Indiana University, told Insider in a recent interview. "Russia might collapse into multiple pieces, like the Soviet Union, and that might not be a bad thing for the world."