Wheat prices soar as Russia threatens global supplies by pulling out of grain deal

• Wheat prices surged Monday after Russia pulled out of its grain export deal with Ukraine.
• Russia withdrew from the agreement Saturday after claiming drones attacked its Black Sea Fleet.

Wheat futures jumped higher Monday after Russia's withdrawal from a deal to export Ukrainian grain via the Black Sea threatened global food supplies.

The Chicago Board of Trade's benchmark wheat contract soared as much as 7.7% to over $893 a bushel on Monday morning but came down slightly to 5.9% to trade at $878.50 a bushel at last check.

The United Nations had brokered a deal in July to allow Russia to export Ukraine's grain and fertilizer through ports in the Black Sea, in a bid to ease global food price inflation.

But Russia said Saturday that it would be pulling out of the agreement for an "indefinite term" because it could not "guarantee safety of civilian ships" from what it claims are Ukrainian drone attacks.

Ukraine is often referred to as the 'breadbasket of Europe' because of its high market share of exports of wheat, corn, and grain.

Its exclusion from world food markets by Russia will drive up prices and increase the risk of famine in the developing world, analysts warned.

"The decision undermines efforts to ease a global food crisis," Deutsche Bank's managing director Jim Reid said in a research note on Monday.

Global leaders also condemned Russia's latest move.

US president Joe Biden said its withdrawal was "purely outrageous" and likely to increase starvation rates, while Ukrainian president Volodymyr Zelenskyy called for Russia to be expelled from the G20 group of countries.

"This is a completely transparent attempt by Russia to return to the threat of large-scale famine for Africa, for Asia," Zelenskyy said in a video address Saturday.

Wheat contracts weren't the only food-based asset squeezed higher by Russia's exit from the Black Sea initiative.

Corn futures rallied as much as 2.8% to $7 a bushel Monday, while soybeans jumped as much as 1.2% to $1,424 a bushel.

Read more: We're in a global food crisis that will wreak havoc on local economies and trigger civil unrest