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Black Sea, Red Sea disruptions could boost U.S. wheat demand

An ag economist says global export and shipping challenges could continue to be supportive for the U.S. wheat complex.

K-State University’s Guy Allen says there are logistical bottlenecks in the Black Sea region. “In recent weeks, we’ve seen increased military action which is destroying a lot of infrastructure. Export facilities, rail transportation as well as some attacks on bulk vessels as well. That’s significantly curtailing exports.”

He tells Brownfield, “And, with the destruction of the infrastructure that’s not going to be fixed anytime soon. Now, the question becomes the accessibility of that wheat in the future months. I think that’s going to have an impact not just in the next few months, but for a number of years to come in the future.”

Allen says there also transportation concerns in the Middle East and Persian Gulf. “That is curtailing shipments through the Red Sea. It does have an impact on grains and dry bulk. They’re having to take long route around Africa. That also has an impact on shipments coming out of the Black Sea region.”

And, he says, there are production concerns from the ongoing drought for wheat-producing countries in Europe.