Wheat futures recovered from multi-month lows after Russian missile attacks on the port of Odesa raised doubts about the workability of a deal to create a safe corridor for grain vessels from Ukraine.

Chicago soft red winter wheat futures for September jumped by 4.5% at one stage – recovering nearly all of the ground lost on Friday, when the signing of a Kiev-Moscow deal to free-up Ukrainian grain exports prompted a slump in prices to a five-month low, on a spot contract basis. The contract later eased back to settle at $7.70 a bushel, a gain of 1.4%.

Hard red winter wheat for September regained 2.4% to close at $8.39 ¾ ½ a bushel, also recovering from a five-month closing low.

Minneapolis spring wheat for September bounced by 1.3% to $8.82 ¾ a bushel.

‘Very nervous’

The gains followed attacks on Odesa by Russia which, according to Ukraine, struck the port with two cruise missiles on Saturday, with two other missiles shot down – attacks which stirred doubts voiced by groups such as Kernel Holding over the safe grain export guarantee.

“The attack on Odessa last Saturday is raising doubts about the resumption of the port activity in appropriate conditions,” said Agritel.

“The market will inevitably remain very nervous in the event of new bombings or doubts about the concrete implementation of this resumption of export activity.”

‘Poor form’

Andrew Whitelaw at Thomas Elder Markets said that the missile strike was “poor form considering the importance of this agreement and reiterates the fears that an agreement with Russia isn’t worth the paper that it is written on.

“The attack on port infrastructure will not alleviate the concerns that ship owners have in relation to the safety of their vessels or the underwriters to insure them.”

A UK grain trader told GrainPriceNews that “it looks like US markets are, after the Odesa attack, putting back into wheat prices much of the risk premium they took out on Friday.

“Look for European markets to trade higher too.”

Paris wheat futures for December settled up 0.7% at E314.75 a tonne, while London wheat for November added 0.8% to £257.30 a tonne.

‘Not a long time’

Mr Whitelaw also said that the period of 120 days of safe passage guaranteed by Friday’s deal was “not a long time to get logistics back up and running”, adding that it would “allow some grain to be exported but potentially limited volumes”.

Furthermore, “while the agreement covers sea-based transport, in-country logistics remain a challenge”.