While Black Sea FOB prices have fallen sharply amid logistical disruptions affecting port operations in Russia and Ukraine, other suppliers are trading at considerably higher levels. The partial disruption of trade flows from the region has begun to redirect demand toward alternative origins such as Romania and France, creating a growing distortion in global price benchmarks. Against a backdrop of tighter global supply and declining stocks, the key question is how long the current Black Sea discounts can last and whether an eventual normalization of logistics could lead to a recovery in international wheat prices.

The international wheat market is currently showing a significant disconnect between prices across different exporting origins. This situation is particularly evident in the Black Sea region, where FOB values have fallen sharply in recent weeks, moving further away from price references observed among other major global suppliers.

Russian wheat FOB prices for 12.5% protein are currently trading at around USD 217 per metric ton, after remaining close to USD 230/t for much of the past several months. While expectations of a large harvest initially contributed to downward pressure on prices, the main factor behind the recent weakness is related to the logistical difficulties affecting the region.

Restrictions and operational shutdowns at key terminals in the Port of Novorossiysk, Russia's main export gateway, have significantly disrupted the normal flow of shipments. A similar situation is unfolding in Ukraine, where operational limitations at the Port of Odesa are also affecting the pace of trade. As a result, Ukrainian FOB wheat prices have fallen toward USD 215/t, while also adding downward pressure on domestic markets.

Paradoxically, this decline in prices is taking place amid rising logistics and insurance costs. Difficulties in executing shipments are increasing operating expenses and reducing effective export capacity, negatively affecting prices offered at ports. At the same time, many international buyers have adopted a more cautious stance in response to logistical uncertainty, limiting new demand for wheat from these origins.

The most visible consequence has been a shift in purchases toward alternative exporters. Romania has emerged as one of the main beneficiaries, with Constanta FOB prices holding at around USD 260/t. Likewise, France has increased its participation in international trade, with FOB prices near USD 263/t for 11% protein wheat. These price spreads reflect the willingness of global buyers to pay a significant premium for origins offering greater logistical reliability and a lower risk of disruptions.

The question increasingly being asked by the market is how long the current Black Sea discounts can be sustained. Despite weak prices, operational difficulties are ultimately expected to translate into lower effective exports from Russia and Ukraine during July and August. In this context, the current bearish pressure may be masking a future reduction in available supply for the international market.

Outside the region, other major exporters appear to have already priced this situation more fully into their markets. In the United States, Canada and Australia, FOB values are showing greater strength and continue to trade above USD 330/t. Beyond adjustments in remaining supplies from the previous crop season, these markets reflect a scenario of tighter availability and a different perception of risk from that currently being priced into Black Sea quotations.

Argentina, meanwhile, is also showing relatively firm market dynamics. Nearby FOB values stand at around USD 240/t and show an upward trend along the commercial curve, a situation that is also reflected in stronger domestic prices and greater firmness in new-crop positions.

Ultimately, the current weakness in Black Sea FOB prices appears to be driven primarily by logistical distortions rather than by structural oversupply. As operating conditions begin to normalize, international demand could once again concentrate on these origins, supporting a recovery in prices. Moreover, with the global crop season developing against a backdrop of tighter supply and global stocks continuing to decline, medium-term fundamentals continue to provide meaningful support for international wheat prices.

Andrés Cannizzo: Market Intelligence Specialist - Wheat, Corn & Fertilizers Safras & Mercado

Editor's Note: This article was originally written and published in Spanish. The English-language version was translated by the Agrolatam editorial team for its international audience. The translation preserves the analysis, data and views expressed in the original article.