The collapse of a major dam in southern Ukraine sent global prices of wheat and corn higher.
Wheat prices gained 2.4% in early trading Tuesday at the Chicago Mercantile Exchange, to $6.39 a bushel. The cost of corn rose more than 1% (to $6.04 a bushel) and oats gained 0.73% ($3.46 per unit).
Prices had jumped higher earlier in the day.
The destruction of Kakhovka dam and hydroelectric power station, which sits on the Dnieper River in an area that Moscow controls, raised anxiety about a potential disruption to global supplies.
There are massive agricultural fields in Southern Ukraine where the dam burst.
Andrey Sizov, managing director of Black Sea agricultural markets research firm SovEcon, said the dam's collapse looks like a big escalation with dire consequences and huge headline risk.
This could be just the start of the bull run, Sizov wrote on Twitter.
Wheat prices have been falling throughout the year.
Citi commodities analysts said Tuesday's incident is a reminder of lingering inflationary risk in the goods market.
Ukraine accused Russian forces of blowing up the Kakhovka dam, while Russian officials blamed Ukrainian bombardment in the contested area and cutting off water supplies to to Crimea, which which Russia illegally annexed in 2014.
It was not possible to verify the claims.
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First Published: Jun 06 2023 | 11:51 PM IST