Wheat falls to pre-war low with food shipments surging in Crimea

US wheat futures tumbled again as Chicago wheat futures extended losses back to the lowest since before Russia invaded Ukraine in February, capping its worst week in a decade.

Meanwhile, surging shipments of agricultural goods in Crimea underscoring how grain is still entering world markets despite the war.

According to Bloomberg, shipments of food out of Russian-occupied Crimea were 50 times normal for this time of year, likely signaling that stolen Ukraine supplies are moving on to importing countries. The news comes as negotiators were seeking a solution to resume Ukrainian shipments at Black Sea ports.

Futures slumped as much as 3.7%, briefly wiping out all of the gains from 2022, before trimming losses and settling 1.8% lower at $7.81 a bushel. That's well off the record of almost $13 notched up in the weeks after the invasion and marks the biggest one-week drop since March 2011.

Sliding wheat prices are giving hopes for relief from the worst food inflation in four decades, with estimates for Russia's grain crop climbing and US farmers harvesting.

"We've taken the war premium out the market and now we need to find out what wheat's worth," Adam Knosalla, a grain broker at Frontier Futures in Minneapolis, said by phone. "The market is searching for demand."

In other markets, corn and soybean futures each notched up small gains as traders assessed dry weather that could damage crops.

Heat in France will intensify from Sunday and temperatures next week could top 40 degrees Celsius (104 Fahrenheit) in some areas, according to Meteo France. In the US, about a third of the corn-growing region is affected by drought, and surges of heat are expected in the western growing belt, a US Department of Agriculture forecast said.

That poses a particular risk for corn fields, which are entering their vital development period. Global supplies have already been dented by the war in Ukraine, which is limiting exports from one of the world's major shippers.