Even as harvest progresses across the United States and other major producing regions in the Northern Hemisphere, U.S. wheat futures continue to post a consistent upward trend. The move is particularly noteworthy because it is occurring during a season typically characterized by a substantial influx of global production into the market.

The main driver behind this trend is the sharp increase in Black Sea supply risk, particularly involving Russia, the world's largest wheat exporter. As a result, uncertainty surrounding the actual availability of wheat for international trade is, for now, outweighing the overall size of global supplies.

Recent attacks involving ports, terminals and vessels heightened concerns on Wednesday, August 26, following confirmation that NKHP, one of Novorossiysk's three major grain terminals, suspended loading operations due to damage caused by the August 12 attack.

The company said repairs could take up to four months. The terminal has an annual capacity of approximately 7.1 million metric tons (7.8 million U.S. short tons), while Novorossiysk's three major terminals have a combined capacity exceeding 20 million metric tons (22 million U.S. short tons).

The situation is significant because this is not simply an isolated disruption. Attacks in recent weeks have affected logistics at Novorossiysk and other infrastructure across the Black Sea and the Sea of Azov, precisely at a time when Russia would normally be accelerating shipments from its new crop.

The consequences are also beginning to emerge in the physical market. Importers are evaluating alternatives to Black Sea-origin cargoes, potentially creating additional opportunities for wheat from the United States, Argentina and Australia. At the same time, increased shipping risks are likely to make vessel operators more cautious when conducting business involving Russian and Ukrainian ports.

The result is a potentially bullish combination of higher logistics costs, rising risk premiums and a possible shift in international demand toward alternative origins. More than the sheer size of the global crop, the market is increasingly pricing the ability of major exporters to effectively move wheat into the hands of international buyers.

In addition to uncertainty surrounding the world's most important wheat-exporting region, prices are finding support from concerns over the production potential of the U.S. corn crop. Wheat and corn have an important substitution relationship in animal feed, meaning that significant moves in corn prices can spill over into the wheat market.

Adding to the bullish outlook are weather conditions in the Black Sea region itself. Drought in parts of Ukraine and southwestern Russia is beginning to raise concerns about the planting and early development of next season's winter wheat crop. This adds another layer of risk to future supplies that, although still months away, are already entering the market's outlook.

Against this backdrop, wheat prices have broken through key technical levels, encouraging additional buying and short-covering. The combination of more supportive fundamentals and technical signals pointing toward continued upward momentum has intensified the rally.

Prices reached on Wednesday, August 26, were among the highest since May 2024, indicating that the market has, at least temporarily, moved beyond the seasonal pressure associated with advancing Northern Hemisphere harvests. Instead, traders are assigning a larger risk premium to uncertainty surrounding export availability.

Implications for the Brazilian Market

For Brazil, the impact is likely to be felt primarily through import parity. The international price increase comes at a time when Argentine supplies of higher-quality wheat are limited, while Brazil's harvest is still in its early stages and uncertainty remains over both the volume and, more importantly, the quality of the new crop.

Under these conditions, even as harvesting advances, seasonal pressure on domestic wheat prices may remain limited, keeping prices close to import parity levels.

ELCIO BENTO: Wheat Market Intelligence Specialist | Safras & Mercado

This opinion column was originally written in Portuguese. This English-language edition was translated and editorially adapted by the AgroLatam.com editorial team, while preserving the author's original analysis, data and opinions.