Ukrainian dam destruction sends global prices of wheat, corn soaring
Russia, Ukraine have accused each other of destroying dam, though neither claim has been verified
Ukraine dam collapse problematic for launch of counteroffensive: Forrest
Wall Street Journal national security reporter Brett Forrest discusses how flooding from Ukraine's Nova Kakhovka dam could affect its fight against Russia on "Varney & Co."
The destruction of a major dam in southern Ukraine has sent global prices of corn and wheat soaring, reversing this year’s fall in prices after a major spike caused by Russia’s invasion of Ukraine in February 2022.
In early trading at the Chicago Mercantile Exchange on Tuesday, wheat prices gained 2.4% to $6.39 a bushel. The cost of corn rose more than 1%, or more than to $6 a bushel, and oats gained 0.73%, or $3.46 per unit.
This satellite image shows the Nova Kakhovka dam in southern Ukraine on June 5, 2023. (Maxar Technologies via AP / AP Images)
The destruction of the Nova Kakhovka dam and hydroelectric power station, which sits on the Dnieper River in an area that Moscow controls, raised anxiety about potential disruption to global supplies given Ukraine’s position as a major exporter of wheat and corn.
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There are massive agricultural fields in southern Ukraine where the dam burst. The collapse has endangered crops in the country's breadbasket and threatened drinking water supplies, with officials also warning of a looming environmental disaster by pointing to oil escaping from the dam machinery and significant flooding.
The wheat futures rally overnight and early Tuesday lost steam as the day progressed. As of around 1 p.m. ET, for example, the price of wheat was down to $6.28 a bushel.
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Ukraine accused Russian forces of blowing up the Kakhovka dam, and Russian officials blamed Ukrainian bombardment in the contested area and for cutting off water supplies to Crimea, which Russia illegally annexed in 2014. It was not possible to verify the claims.
The Associated Press contributed to this report.