Wheat prices fall after Putin’s comments on possibility of peace deal

Global wheat futures dropped sharply on Thursday after Russian President Vladimir Putin acknowledged the possibility of a peaceful settlement to the war in Ukraine.

The statement triggered a wave of profit-taking in grain markets, which had surged to multi-year highs in the preceding weeks amid supply disruptions in the Black Sea region.

Speaking at the plenary session of the Eastern Economic Forum in Vladivostok, Putin said there was a chance for a negotiated settlement.

“Is there a chance? In my view, yes, there is,” Putin said.

He noted that a number of countries, including the United States and China, are prepared to support a peace deal. At the same time, the president added that resuming negotiations had become more difficult due to Ukrainian attacks on shipping and Kyiv’s call on civilian aircraft to avoid Russian airspace.

The market reaction was immediate. December futures for milling wheat on the Paris exchange fell 3.2% to €248.5 per metric ton, dropping to €243.25 during the session. In Chicago, December futures declined 2.8% to around €6 per bushel on the Chicago Board of Trade, pulling back from multi-year highs reached earlier in the week. According to Trading Economics, wheat fell more than 4% compared with the previous day’s closing price.

As the trading session progressed, the sell-off slowed as traders concluded that Putin’s remarks did not signal any immediate military settlement. One German trader told Reuters:

“Markets react sharply to any news that could open the possibility of resuming Russian and Ukrainian grain shipments without the threat of attacks.”

However, according to market participants, the overall picture had not changed: grain from the Black Sea region was barely moving, and the conflict in the Middle East had pushed crude oil prices higher.

Putin’s comments came after several weeks of rising wheat prices driven by disruptions to Black Sea exports. As Al Jazeera reported, prices surged sharply amid the war’s impact on shipping routes and reduced production due to drought. According to Axios, wheat was trading at levels not seen since early 2023.