By Chris Clayton
Russia's moves on Saturday to pull out of a United Nations grain agreement for Ukraine sent wheat, corn and soybean prices higher in early trading Monday; but reports out of Ukraine also indicated ships were still leaving ports early Monday with grain.
Despite the Russian announcement, Ukraine's government on Oct. 31 reported 12 ships had left ports carrying 354,500 metric tons (mt) of grain for Africa, Asia and Europe.
Ukrainian Minister of Infrastructure Oleksandr Kubrakov on Monday tweeted that a ship, the Ikaria Angel, left port with 30,000 mt of wheat for the World Food Program. "These feedstuffs were intended for the residents of Ethiopia, who faced the real possibility of mass starvation," Kubrakov tweeted.
The United Nations and Turkey delegations also inspected another 40 ships.
On Sunday, Ukraine's government reported 218 vessels participating in grain exports out the Black Sea had been blocked from moving, including 95 ships that had already left Ukrainian ports and were awaiting inspection.
"Representatives of the U.N. and Turkey are negotiating with the Russian delegation and continue to look for solutions for the full implementation of the Black Sea Grain Initiative," Ukraine's government stated on its website.
The United Nations Joint Coordination Center acknowledged Russia had suspended its participation in the Black Sea Grain Initiative, but stated the U.N., Turkey and Ukraine had agreed to continue moving humanitarian ships. The U.N. on Monday also reported 12 ships leaving Ukrainian ports with shipments of corn, wheat, soybeans, peas, rapeseed and sunflower meal.
Since the grain agreement was struck, more than 9.7 million metric tons (mmt) of grain have moved out of Ukraine's Black Sea ports.
Russia wants a meeting of the U.N. Security Council and has offered to provide as much as 500,000 mt of grain to poor countries "free of charge in the next four months" while working with Turkey, Russian Ag Minister Dmitry Patrushev told a Russian news channel on Saturday.
News of Russia's action had a significant impact on grain trade early Monday. December wheat futures were up more than 51 cents a bushel to more than $8.80 a bushel and the March contract early Monday was more than 49 cents higher. By mid-morning, the December wheat contract had dialed back, but was still up more than 32 cents, to $8.62 a bushel.
December corn was up 8 cents to $6.88 a bushel after briefly reaching as high as $7 before coming back down. The March corn contract was at $6.93, up 7 cents as well.
November soybeans had been over $14 a bushel before coming back down and were at $13.91 a bushel at mid-morning. The January soybean contract remained above $14.04 a bushel.
Joseph Glauber, senior research fellow at the International Food Policy Research Institute in Washington, told the Associated Press that Russia's withdrawal would lead to questions over whether other shippers will take the risk to enter the region.
"I suspect the answer is no," Glauber said to AP. For "insurance companies and others who are insuring these boats ... rates are going to go up and likely be prohibitive."
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