WHEAT futures soared to their highest levels on record in the US as the grain market faced the grim reality that exports out of war-stricken Ukraine are unlikely to resume any time soon.
In particular, there has been concern that Russia appears to be strategically targeting major Ukrainian ports as part of its offensive.
Already the port city of Mariupol, on the Sea of Azov, has sustained severe damage as part of a Russian siege, with Ukrainian officials still trying to assess the extent of damage to the port itself.
While Mariupol is primarily a coal and steel port there is significant unease that Russia will now look to target other ports.
Wire reports have suggested residents of Odessa, home to Ukraine's largest grain port, are on high alert about a potential attack.
Damaged ports change the dynamic of grain exports from the region and reduce hopes of a quick snap-back to normal trade volumes should there be a resolution to the conflict.
Markets are becoming increasingly pessimistic about sourcing grain exports from the region over the next couple of months and now doubt is growing about crop condition in Ukraine.
Winter crops have emerged from dormancy and normal crop husbandry such as spraying and fertiliser application is not happening because of the fighting.
It is also time for Ukraine's spring sown wheat and barley to go in the ground and the optimum planting window is being missed, leading analysts to start to cast doubt about available new crop exports as well as the current crisis with executing old crop consignments.
All of this has led to a furious week of trading on US futures exchanges.
Wheat futures have now gained a staggering 55 per cent from an already high starting point since the Ukrainian conflict began.
Chicago Board of Trade May 22 futures topped at a dizzying $US12.94 a bushel, a clear record for the near contract, which converts to $649 a tonne in Australian dollars.
Futures came back slightly in the Tuesday US trading session but were still at a heady $US12.73/bu on Wednesday morning Australian time.
However, the cramped Australian shipping stem is stopping Australian growers from getting a look at the record values.
There is a nominal price of around $385/t in Western Australia for APW quality wheat up to $430/t for APW in Victoria, meaning Australian wheat remains well and truly the cheapest in the world.
However, while the official prices remain low, very little action is taking place, with Commonwealth Bank analyst Tobin Gorey saying in his column that he believed any actual transactions would take place at a markedly higher price more reflective of world pricing.
Shipping capacity is scarce until the end of April but after then new contracts will be negotiated with international buyers at the higher levels that are on offer since the war started.
The majority of Australia's old crop is now sold but there are still good parcels of unpriced grain which growers are now likely to hold until they see a material improvement in Australian cash prices.
In the short term the focus is now on getting wheat supplies into the Middle Eastern and North African nations normally reliant on Russia and Ukraine.
Al-Jazeera News is already reporting concerns of food shortages in Lebanon, with only a month's reserve of wheat left, while Egypt is also casting its net further to try and source wheat.
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