By Gus Trompiz
PARIS (Reuters) -Wheat futures are expected to leap on Monday as Russia's withdrawal from a Black Sea corridor agreement puts Ukrainian exports at risk, analysts said.
Moscow suspended its participation in the Black Sea deal on Saturday, in response to what it called a major Ukrainian drone attack on its fleet in Russian-annexed Crimea.
Kyiv said Russia was making an excuse for a prepared exit from the accord while Washington accused Moscow of weaponising food.
Wheat markets have been very sensitive to developments in Moscow's eight month-old invasion of Ukraine, as both countries are among the world's largest wheat exporters.
Ukraine is also a major corn supplier.
The establishment of the corridor, which allowed over 9 million tonnes of grain and oilseed commodities to be shipped from Ukrainian ports, helped to steady grain markets and curb global prices after they hit record levels.
That relative calm is likely to end when Chicago and Paris wheat, the world's two most-active wheat futures contracts, start their trading week on Monday.
"Russia's announcement is certainly bullish for prices and the start of the week is very likely to see prices climb, simply because less grain is going to come out of Ukraine," Arthur Portier of consultancy Agritel said.
Purchasing of grain for Black Sea ports in Ukraine has stopped following Russia's decision, a Ukrainian broker said.
Ukraine's infrastructure ministry said on Sunday 218 vessels were "effectively blocked" by Russia's decision to suspend its participation in the grain export deal.
The corridor suspension could trigger a buying rush in Chicago, where investment funds have a net short position.
CME Group applies daily limits on price movements, with the current $0.70 cap on its Chicago wheat contract implying a maximum possible rise of 8.4% compared with Friday's close of $8.29-1/4 a bushel. [GRA/]
However, news that the United Nations, Turkey and Ukraine - the other parties to the corridor deal - had agreed on Sunday to a plan for vessel movements and inspections on Oct. 31 tempered reaction to Russia's day-earlier announcement.
"There were some mentions of wheat hitting limit tonight, but given the relative calm after the drone attack, I think 25 cents in wheat is fair," Joe Davis, director of commodity sales at brokerage Futures International, said.
Market participants are watching to see if the corridor deal can be salvaged, as the U.N. pursues negotiating efforts.
Carlos Mera, head of agricultural commodity markets research at Rabobank, said wheat futures might jump by 5% to 10%, but reaction could fade as Moscow quitting the deal had been partly anticipated while Russia's exports have increased.
"There are increasing exports from Russia so in the short term availability might still be there from the Black Sea," he said.
But in the absence of the corridor, some traders and analysts say Russia does not have extra logistics capacity to fill the gap while adverse weather is creating concern about harvest supplies in southern hemisphere exporters Argentina and Australia.
"The end of the corridor is inevitably going to push up prices and that makes the situation very bad for importers," Portier said.
(Reporting by Gus Trompiz, additional reporting by Pavel Polityuk; editing by Barbara Lewis and Diane Craft)