Russia reported a Ukrainian drone attack on the Ust-Luga port, the country's main wheat export route, which sparked a fire after 150 drones were shot down. Combined exportable supply from Russia and Ukraine would fall to 44.0 million tonnes in 2026/27, according to Analytics Bar.
Russian authorities reported on Wednesday a drone attack launched by Ukraine against the Ust-Luga port, in the Leningrad region, currently the country's main wheat export route, while talks between Russia and Ukraine mediated by the United States are under way in Abu Dhabi, the capital of the United Arab Emirates.
"During the night, 150 enemy drones were shot down over the Leningrad region. The target of the attack was the Ust-Luga port area in the Kingiseppsky district. As a result of the impact of several drones, a fire broke out," said the governor of the Leningrad region, Alexandr Drozdenko, on social media.
Faced with the "logistics blackout" in the Black Sea caused by reciprocal attacks by Russia and Ukraine on port terminals and vessels, Russia has had to redirect cargoes to Baltic ports, which require a disproportionate logistics cost.
For that reason, FOB prices for Russian wheat collapsed. Ukrainian grain went through a similar process, as it must rely on railways and Danube ports to export grain, with a huge extra cost that affects export prices and, by extension, the "pockets" of producers.
So far, the only official information on the negotiations taking place in Abu Dhabi mentions only agreements to carry out a prisoner exchange. There is no concrete progress indicating that the Black Sea logistics routes could be restored.
The USDA monthly report again adjusted its estimate of exportable wheat supply from Russia and Ukraine to 39.0 and 11.5 million tonnes, respectively. However, local analysts believe those figures remain overly optimistic. Ukrainian agricultural consultancy Analytics Bar estimates that combined exportable supply from both countries for the 2026/27 cycle would not exceed 44.0 million tonnes, versus 62.1 million in the 2025/26 season.
Despite the contraction in available supply of Russian and Ukrainian wheat, international prices for the grain continue to show a declining trend, in line with the abundant supply in Australia and Argentina.
