Wheat prices drop after Putin hints at Ukraine peace deal

Global wheat futures fell sharply on Thursday after Russian President Vladimir Putin said there was a chance of a peace agreement to end the war in Ukraine, triggering a wave of profit-taking across grain markets that had surged to multi-year highs in recent weeks amid escalating Black Sea supply disruptions.

Putin's Comments Spark Sell-Off

Speaking at the plenary session of the Eastern Economic Forum in Vladivostok, Putin said, "Is there a chance? In my view, yes, there is," referring to the prospect of a negotiated settlement. He noted that several countries, including the United States and China, were ready to support a peace deal. However, he added that restarting talks had become more difficult because of Ukrainian attacks on shipping and Kyiv's call for civilian aircraft to avoid Russian airspace.reuters+1

December milling wheat on Paris-based Euronext fell 3.2% to €248.5 per metric ton, after dropping as low as €243.25 earlier in the session. In Chicago, December wheat fell 2.8% to $7.52 1/4 a bushel on the Chicago Board of Trade, pulling back from multi-year highs reached earlier in the week. According to Trading Economics, wheat declined more than 4% from the previous day's close.marinelink+3

Traders See No Immediate Change on the Ground

The sell-off moderated as the session progressed, with traders concluding that Putin's statements did not signal any immediate military de-escalation. "Markets are sensitive to any news which could allow the resumption without attack of Russian and Ukrainian grains shipments," one German trader told Reuters. But the fundamental picture, traders said, remained unchanged: Black Sea grain is largely not moving, and conflict in the Middle East has driven up crude oil prices.marinelink

The comments came after weeks of rising wheat prices driven by disruptions to Black Sea exports. As Al Jazeera reported, wheat prices had risen sharply amid the war's impact on shipping routes and drought-driven production declines. Axios noted that wheat was trading at levels not seen since early 2023.aljazeera+1

Broader Commodity Ripples

Putin's peace signals also capped gains in energy markets. Oil prices had climbed following US strikes on Iran earlier in the week, with Brent crude futures rising to $95.78 a barrel and US West Texas Intermediate reaching $91.64, both hitting six-week highs. But the prospect of reduced geopolitical tensions limited the rally.bairdmaritime

Meanwhile, Saudi Arabia's tender to purchase 535,000 tons of wheat added a new layer of demand, with traders suggesting EU origins from Romania and Bulgaria, as well as North American suppliers, could compete for the contract given elevated freight costs from Russian Baltic ports. A cargo of 33,000 tons of soft wheat from Rouen port headed to Libya suggested buyers may already be shifting away from Black Sea origins.marinelink