Market News & Headlines >> Purported Drone Attack on Kremlin Sends Grain Futures Soaring

Russia’s claim that Ukraine launched a drone attack on the Kremlin in Moscow overnight sent wheat futures soaring in Wednesday price action with traders fearing an escalation of the Russia-Ukraine war.

The news also cast fresh doubt on prospects for the extension of the Black Sea export deal between Russia, the United Nations, Turkey and Ukraine, which is set to expire on May 18.

Russia accused Ukraine of trying to kill Russian President Vladimir Putin with the drone attack. The Kremlin said two drones were used in the alleged attack but had been disabled by Russian defenses. In a statement on its website, the Kremlin said it considered the attack a planned terrorist act and reserved the right to “take retaliatory measures where and when it sees fit.”

Some analysts are calling the attack a “false flag” operation perpetrated by Russia to give it a pretext to escalate the war. We would not presume to make a judgement on those claims right now, but would note that U.S. Secretary of State Antony Blinken said earlier today that Washington has not been able to validate the reported attack, and that Russian assertions should be taken with a "very large shaker of salt".

Ukraine’s President Volodymyr Zelenskiy denied Ukraine was involved in the attack. 

In comments sent to Reuters News Service, Ukrainian presidential adviser Mykhailo Podolyak said: "In my opinion, it is absolutely obvious that both 'reports about an attack on the Kremlin' and simultaneously the supposed detention of Ukrainian saboteurs in Crimea ... clearly indicate the preparation of a large-scale terrorist provocation by Russia in the coming days."

A British expert on Russia, Mark Galeotti, told Reuters it was unlikely that the alleged attack had targeted Putin, who "notoriously rarely goes to the Kremlin, let alone stays there overnight".