It’s all about Black Sea wheat this morning and the potential disruptions to the flow of wheat from Russian and Ukraine ports. Ukraine attacked Russian boats passing through the Kerch Straight late last week. Russian authorities have temporarily closes the straight, limiting smaller grain vessel access to shallower ports in the Azov Sea.
Roughly 25% of Russian wheat exports pass through this straight annually. Russia exports around 45-48mt of wheat annually. Let’s call it 46mt. In simple terms this would average out to about 30-40kt per day, or 250kt per week (nice round number) getting delayed or diverted for every week it closed.
This closure is probably old news now, it happened days ago. What is new news is the Russian retaliation on the port of Odessa. Russia has now carried out 5 days of drone strikes on the ports of Odessa and Chernomorsk. These strikes will limit export capacity from Ukraine via the Black Sea.
Is this new to Ukraine exports. Russia basically closed Odessa down earlier in the conflict and Ukraine shipped grain via border ports with Romania.
There could be a greater risk arising from the recent escalation though. European Commission President Ursula von der Leyen said while visiting Kyiv that she would announce steps to deepen “Ukraine – European defense integration”, what ever that means. “I will announce new initiatives to integrate our defense industries. So we can produce more, and faster,” she wrote on X.

Hard red winter wheat hit the daily limit during the session before pushing a smidge lower. The rally was across all grades of wheat. FOB values for US and Canadian wheat out of the Pacific Northwest pushed higher. The stronger AUD will absorb some of the move, but comparing this mornings conversions to yesterdays, we see HRWW +AUD$19.28/t, US spring wheat +AUD$14.44/t and club white wheat +AUD$9.02/t. Canadian spring wheat was up AUD$9.87/t using the same comparison method. Aussie H2 now potentially US$5.00 under HRWW using yesterdays Aussie H2 grower bids as a guide.