Wheat Prices Hit Two Year Low, While “Super” El Niño Event Possible

Reuters writer Pavel Polityuk reported today that, “Russia carried out a big wave of air strikes on three Ukrainian regions early on Thursday in which Ukrainian officials said some attack drones had hit their targets but did not say what was damaged.

“Ukrainian air defences shot down 34 of 44 incoming ‘Shahed’ drones, the air force said. The strikes targeted the regions of Mykolaiv and Odesa in the south and Kirovohrad in central Ukraine, the military said.”

Also today, Bloomberg News reported that, “An infrastructure facility on the outskirts of the Black Sea port city of Mykolayiv was hit by a missile late Wednesday, regional governor Vitaliy Kim said on Telegram. Ukrainian air defense shot down 33 out of 44 Shahed drones launched by Russia overnight, the Ukrainian air force said on Telegram.

“Drones were intercepted in Odesa, Mykolayiv and in central Ukrainian regions, military spokeswoman Natalia Humenyuk said on television.”

Earlier this week, Russian drones also targeted Ukrainian port infrastructure and warehouses.

The Bloomberg article added that,

Prices for hard red winter wheat, the top variety grown in the US, slumped to the lowest in two years as American exports face stiff competition in the global market.

“Russia, the world’s top exporter, along with other Black Sea producers, are expected to harvest bumper crops.”

Dow Jones writer Kirk Maltais reported yesterday that, “Wheat fell to its lowest level since December 2020 today, driven in large part by the latest developments out of the Black Sea warzone.”

“In addition to potentially improving the flow of Ukrainian grains through Europe, wheat is also being influenced by lower prices for exports on the world stage.”

Also yesterday, Reuters writer Jonathan Saul reported that, “Ukraine’s move to create a shipping channel for grain exports is a positive step for global food security, although efforts continue to reach a new agreement over a broader Black Sea corridor, the top U.N. trade official said on Wednesday.

“Russia in July quit a U.N.-backed deal which had enabled exports from Ukraine to sail from three approved ports.

“Since then, Kyiv has launched what it calls a temporary humanitarian corridor in an effort to break Russia’s de facto blockade. Two ships have sailed in recent days from the Ukrainian port of Chornomorsk using the channel, which hugs the Romanian and Bulgarian coasts.”

And today, New York Times writer Natasha Frost reported that, “Ukraine is increasingly managing to gain a degree of control over part of the disputed waters of the Black Sea, aided by an intensifying military campaign and Ukraine’s growing ability to hit Russian warships, experts say.

“In recent weeks, seven cargo vessels have successfully sailed a new shipping corridor established by Ukraine to evade Russia’s de facto blockade of its Black Sea ports, according to the Ukrainian Navy. Once the ships left Ukrainian waters, they hugged the western Black Sea coast near NATO members, a likely deterrent where Russia is unlikely to take action.”

The article noted that: “‘We’ve seen that Ukraine is taking an increasingly offensive approach in the Black Sea,’ said Thea Dunlevie, an analyst at the Center for Maritime Strategy.”

Reuters News reported today that, “Fears persist over Ukraine’s ability to export grain as Russia again attacked its port infrastructure, but several ships have nevertheless successfully navigated a Black Sea route.

“Meanwhile, Poland’s agriculture minister said talks to resolve a dispute about a Polish ban on imports of Ukrainian grain were on track.

“Ukraine’s agriculture ministry said it is keeping the 2023 grain crop forecast unchanged at 57 million tons.”

Elsewhere, Scott Dance reported in today’s Washington Post that, “A fast-forming and strengthening El Niño climate pattern could peak this winter as one of the most intense ever observed, according to an experimental forecast released Tuesday. The new prediction system suggested it could reach top-tier ‘super’ El Niño strength, a level that in the past has unleashed deadly fires, drought, heat waves, floods and mudslides around the world.

“This time, El Niño is developing alongside an unprecedented surge in global temperatures that scientists say has increased the likelihood of brutal heat waves and deadly floods of the kind seen in recent weeks.

“Will that make El Niño’s typical extremes even more dramatic in the winter?

“‘My answer would be — maybe,’ said David DeWitt, director of the National Oceanic and Atmospheric Administration’s Climate Prediction Center.”

The Post article added that, “NOAA scientists declared the pattern’s arrival in June, by which point there were already signs of unusual warming in the Pacific and other waters around the world.

“As global ocean and surface temperatures surged into record territory in the months that followed, official predictions of El Niño’s intensity have solidified. NOAA’s climate forecasters this month estimated the chance of a strong El Niño pattern by winter in the Northern Hemisphere at 71 percent. Its current strength is moderate.