Wheat prices experienced a significant retreat on Wednesday as markets engaged in profit-taking following recent gains. According to Reuters, Chicago wheat futures fell 18-1/4 cents to $7.28-3/4 per bushel, holding below the 3-1/2-year high of $7.95 that was struck last week. The decline came despite earlier gains when news of a Ukrainian strike on the Russian port of Novorossiysk put focus back on war disruption to Black Sea trade. Ukraine struck targets at Novorossiysk including a naval base and a terminal for loading oil, with traders citing unconfirmed reports that grain infrastructure at the port had also been damaged.
The ongoing conflict has severely disrupted grain exports from the Black Sea region, with tit-for-tat attacks by Russia and Ukraine on each other's ports and shipping bringing exports to a near halt. As reported by Reuters, the market continues to assess diplomatic efforts to end Russia's war with Ukraine against continued disruption to Black Sea exports. This has prompted buyers to seek alternatives, with the Black Sea grain export disruptions leading Asian wheat importers to buy at least half a million metric tons of Australian and Argentine wheat in recent deals, according to trade sources. The disruptions are part of a broader pattern of climate-driven agricultural challenges affecting global food security.
The wheat retreat was accompanied by broader declines in agricultural commodities, with CBOT corn falling 5-3/4 cents to $5.27-3/4 a bushel and soybeans ticking down 6-3/4 cents to $13.09-1/2 a bushel. According to Reuters, corn and soybeans both struck their highest levels in around three years last week, supported by concerns about U.S. yields and Black Sea disruptions. The decline in soybeans came despite Chinese purchases of U.S. soybeans, with the USDA reporting that exporters sold 340,000 metric tons of soybeans to China for 2026/2027 delivery, along with an additional 100,000 tons sold to unknown destinations. A rally in oil prices, with Brent futures surpassing $100 a barrel for the first time since July, has also provided support to corn and soybeans used for biofuel production.
Market attention is turning towards the USDA's supply-and-demand forecasts on Friday that will offer a gauge of weather damage to Midwest crops. As reported by Reuters, the USDA estimated that 56% of the corn crop was in good-to-excellent condition, down 1 percentage point from the previous week but in line with average analyst expectations. The good/excellent score for soybeans remained unchanged at 58%, exceeding average expectations of a 1 point fall. The forecasts are awaited as an indicator of the extent to which hot, dry spells this summer hurt U.S. Midwest crops, with corn and soybeans both having struck their highest levels in around three years last week.
Despite Nigeria's efforts to reduce wheat import dependency, the country remains heavily reliant on foreign markets for domestic demand. As reported by The Hindu BusinessLine, Nigeria is still dependent on foreign markets for the supply of up to 98% of its domestic wheat demand, with Canada, Australia, Russia, the United States and Black Sea countries being the key suppliers. However, recent data from the AfDB shows significant progress in domestic production, with wheat cultivation expanding from 11,820 hectares in 2021 to nearly 400,000 hectares by 2025, yields up 30%, raising domestic production from less than 1% of national demand to 20%, about 1.12 million tonnes worth over $500 million. For the 2026-27 marketing year, wheat production is projected to reach 140,000 tonnes, a 7% increase, but imports are expected to rise to 7.2 million tonnes to meet demand of over 6.8 million tonnes.
