Putin speech raises fears over export corridor, increased war risks

Russian President Vladimir Putin's partial mobilization announcement Wednesday raised concerns over Ukraine's export corridor agreement, with futures markets spiking and trade on hold awaiting further development.

Russia was also expected to announce referendums to be held in Ukraine's occupied territories for Luhansk, Donetsk, Zaporizhzhia and Kherson regions to join the Russian Federation, which could escalate the conflict furthermore.


The Ukrainian market showed a mixed bag of reactions, with some trade sources expressing uncertainty about what will happen next and what to expect given the export corridor agreement will expire on November 20, while others said they would continue exporting goods as long as it is possible.

“Given this news, we are not stopping the trade but increasing the pace in order to deliver the grains faster,” a trader said.  

Some sources said that no matter what the Russian president said, grain exports from Ukraine would continue, with or without Russian guarantees and support.

Offers for Ukrainian goods were mostly unchanged from yesterday, with sellers expressing concerns about a lack of buying interest, as buyers are not in a hurry to book Ukrainian cargoes for forward deliveries amid high force major risks.

"People are worried; let's see how the market will react. No one knows how it will develop, tankers take more risk going to Ukraine, but the price of sunoil is not increasing,” a second trader said.

Some Black Sea market participants also mentioned Ukraine having around two months to push as much grains and vegoils as possible and get prepared on the military side of things, as training of new Russian soldiers will take approximately the same amount of time.

"That is adding a bit of risk premium again on shipments from the Black Sea...except for Ukrainian spot need to sell, fewer people willing to offer big volumes of sunoil to India or other places till November – until we know if big ports agreement will continue or not,” another trader said.


The Russian grain market reaction was also uncertain, with deep-sea offers seen stable at around $320/mt FOB for 12.5% protein wheat and the spread with buying interest still wide, despite firmer bids at $310-316/mt.

Meanwhile, shallow-water market prices jumped significantly – with Russian 12.5% protein wheat up by around $10-12/mt day-on-day and offered at $345-347/mt CIF Marmara versus a buying idea at $340/mt.

Global market

Global market participants were mainly concerned about the stability of grains and vegoils supply from the Black Sea region, especially Ukraine's export corridor operations.

"Let's hope for the best, but for now it looks like further escalation... hopefully Ukraine can beat them already in the East so they will not get that far but there is a very high chance that they close the corridor again I think,” a Europe-based trader told Agricensus.

“A speech, in general, is an escalation; escalation probably means further sanctions, which potentially limits wheat supply, therefore it means bullish markets,” another trader said.

Trade sources also mentioned potential freight rates increase for both Ukraine and Russia amid higher risks.

“No [vessel] owner or operator is ready to work at any rates right now as everybody wants to see what will happen next, as not only shipping is affected but also grain prices will increase, which will heavily affect the trade,” a freight broker said.

At the same time, other freight sources said that the market has not fully reacted yet, digesting the news.


After a strong surge on the CME exchange prior to Putin’s speech Tuesday, the December Chicago Soft Red Winter (SRW) wheat contract started in the red Wednesday but moved up again by $0.09/mt during the day and was trading at $9.02/mt at 1216 ET.

Euronext wheat futures meanwhile continued to move upwards, adding another €7.75/mt to the December contract, pushing it to €347/mt by 1822 CET.