Wheat Rises As Grain Ship In Black Sea Hit By Mine

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by Tyler Durden
Friday, Dec 29, 2023 - 12:50 PM

The war in Ukraine has transformed parts of the Black Sea into a conflict area. Commercial vessels transporting agricultural goods from the 'breadbasket of Europe' have been caught in the crossfire.

The latest maritime incident occurred on Wednesday when a Panama-flagged bulk carrier struck a mine in the Black Sea while sailing to a port on the Danube River to load grain, according to Reuters

"A Panama-flagged civilian vessel was blown up on an enemy sea mine in the Black Sea ... The vessel lost its course and control, and a fire broke out on the upper deck," Ukraine's southern military command said on Telegram.

Bloomberg shipping data shows that the Greek-operated "VYSSOS" is possibly beached near the Danube Dela Biosphere Reserve. This could be because the captain is preventing the vessel from sinking after the blast. 

The sailing of VYSSOS shows bulk carriers are still moving farm goods to and from Ukraine despite the Russian defense ministry saying all cargo ships in the Black Sea bound for Ukraine are potential military targets. This followed the end of the Russia and Ukraine Black Sea agreement - brokered by Turkey - which ended over the summer - that allowed cargo ships to sail along a corridor in the Black Sea to Ukraine

Wheat prices in Chicago are up about 2.5% since the incident earlier this week. 

"Wheat is finding at least a bit of support again this morning on more action in the Black Sea," Matt Zeller, senior market analyst at StoneX Financial Inc., said in a note.