Ukraine Dam Destroyed, Wheat Jumps; “Ukrainian Forces Step up Attacks”-US Corn Condition Deteriorates

Wall Street Journal writers Matthew Luxmoore and Bojan Pancevski reported today that, “A major dam and power station in a Russian-occupied part of Ukraine were destroyed Tuesday, casting uncertainty over Ukraine’s planned counteroffensive in the south of the country.

“Both sides accused each other of being responsible for an incident that caused serious flooding, put thousands of homes at risk and potentially threatened the safety of Europe’s largest nuclear power plant.

“The destruction of the dam could win Russia time to reconfigure its defenses while at the same time depriving Ukraine of some options for its expected counteroffensive. Crossing the vast Dnipro river along that stretch of the front will now become impossible, said Nico Lange, a former German Defense Ministry official.”

Bloomberg writer James Poole reported today that, “Wheat surged after an escalation in fighting between Russia and Ukraine, including the destruction of a giant dam and damage to an ammonia pipeline that Russia sees as key in talks about maintaining the flow of Ukrainian grain shipments through the Black Sea.”

“Ukraine said Russia blew up the dam in the country’s south, unleashing a torrent of water that threatens residents and complicates the battlefield separating the two armies along the Dnipro river. The dam is some way from the three Ukrainian ports covered under the Black Sea grain deal, but the flooding poses a severe risk to people, transport and logistics.”

The Bloomberg article added that, “Separately, Ukraine reported that an ammonia pipeline was damaged by Russian shelling in the Kharkiv region close to the border between the two countries. Russia regards the pipeline, which was shut down during the war, as key in talks on keeping Ukraine shipments flowing through the Black Sea.”

Also today, Reuters writes Gus Trompiz and Naveen Thukral reported that,

Chicago wheat climbed over 2% on Tuesday to a near three-week high as a breach in a dam in southern Ukraine heightened worries about an escalation in the war between major grain exporters Ukraine and Russia.

The article also noted that, “The U.S. Department of Agriculture (USDA) rated 64% of the U.S. corn crop in good-to-excellent condition in its weekly crop progress report on Monday, down 5 percentage points from a week ago and below the lowest in a range of estimates in a Reuters poll.

“After the market closed on Monday, the agency rated 62% of the soybean crop as good-to-excellent in its first 2023 condition ratings for the oilseed, below most trade expectations.”

Yesterday, Bloomberg writers Michael Hirtzer and Dominic Carey reported that, “The US corn crop deteriorated by the most in almost three years as a lack of rain hit yield potentials in the world’s top producer of the grain.

“Just 64% of the nation’s corn crop was rated good-to-excellent in the US Department of Agriculture’s weekly report, a 5 percentage-point decline that was the biggest since August 2020 and more than double the drop forecast in a Bloomberg survey of analysts.”

Elsewhere, Reuters writer Naveen Thukral reported today that, “Total Australian winter crop production, including wheat, is forecast to fall by 34% to 44.9 million tonnes in 2023–24, around 3% below the 10-year average to 2022–23 of 46.4 million tonnes, according to the June crop report from the Department of Agriculture, Fisheries and Forestry.

“China’s wheat crop has been hit by excessive rains just before the harvest, resulting in widespread crop downgrades.

“The European Commission said on Monday it was extending until Sept. 15 an arrangement whereby five of Ukraine’s EU neighbours can restrict imports of Ukrainian grain.”

More broadly on the war in Ukraine, Financial Times writers Roman Olearchyk and Max Seddon reported yesterday that, “Ukraine’s armed forces stepped up attacks against multiple Russian positions in the east of the country as Kyiv’s long-awaited counter-offensive entered a new phase after weeks of preparatory operations.

“Ukrainian officials refused to discuss whether the uptick in offensive activity in Donetsk province over the weekend and into Monday amounted to the start of full-blown counter-offensive. But deputy defence minister Hanna Maliar admitted ‘in some directions we are moving to offensive actions.'”

And Samantha Schmidt, Isobel Koshiw and Mary Ilyushina reported on the front page of today’s Washington Post that, ” Ukraine’s military made gains against Russian forces in multiple locations along the eastern front, the country’s deputy defense minister said Monday, as an increasing cadence in combat operations raised speculation that the much-anticipated counteroffensive was finally imminent.”