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Russia resumed their targeting of key Ukrainian shipping infrastructure this morning, slamming the river port of Izmail with missile and drone strikes. Izmail was the second port city along the Danube River that Russia has targeted over the last two weeks, responding to several cargo ships’ attempts to bypass a partial blockade of the Black Sea. Following the collapse of the Black Sea Grain Initiative, Russia said that it would consider all ships bound for Ukrainian ports as “potential carriers of military cargo”.

The latest strikes are likely to serve as a warning shot to shipowners that may still be willing to enter Ukrainian ports. Shipping operations at Izmail have been suspended, despite as many as six cargo ships recently declaring their intent to dock there. Grain exports have fallen significantly since the suspension of the Black Sea Grain Initiative and Russia is likely to continue diminishing Ukrainian export capacity to raise the value of its own wheat and corn exports.

Related ETFs: Teucrium Wheat Fund (WEAT), Invesco DB Agriculture Fund (DBA)

Russia has expanded a wave of drone and missile strikes against Ukrainian ports, which began with the country’s major Black Sea terminals, but has now stretched into a string of ports along the Danube River that Ukraine has tried to utilize as a relief valve.

Following the Collapse of the Black Sea Grain Initiative following its expiration on July 17, which MRP noted was a likely outcome after the destruction of the Kakhovka Dam in June, wheat prices have witnessed several spikes, as traders try to anticipate how significant the ending of the agreement will be on global corn and wheat markets. The quadrilateral deal between Russia, Ukraine, Turkey, and the UN assured agricultural commodities could safely transit through the Black Sea and through Turkey’s Bosphorus Strait and into the Mediterranean Sea. Ukraine is one of the world’s leading grain exporters, accounting for 10% of the world wheat market, 15% of the corn market, and 13% of the barley market. The now-defunct grain deal facilitated the shipment of almost 33 million metric tons of grain product through the Black Sea over the course of roughly a year, cutting wheat prices in half from their 2022 highs. Reuters notes that mid-way through July, Ukraine’s grain exports for the month were down by about -40% from the same time in June.

To ensure that there were little to no options for Ukraine to transport their grain by ship, Russia has tried to use force to cripple Ukraine’s port infrastructure that had been used to facilitate the transport of grain. That campaign began in the Odesa region on July 17 and continued for the better part of a week. Dozens of drones and Kalibr cruise missiles were volleyed toward the city over the stretch of several consecutive nights described as “very powerful, truly massive,” by Serhiy Bratchuk, spokesperson for the Odesa military administration. According to the Ukrainian armed forces, one barrage on the evening of July 18 may have…

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