MarketsFarm — Russia’s invasion of Ukraine has roiled grain and oilseed markets, with the unprecedented situation likely to lead to volatile and choppy activity in wheat, corn and soybean futures for the time being.
Chicago and Kansas City winter wheat contracts have posted the largest gains in response to the conflict, with the closure of export terminals on the Black Sea likely to shift more demand to the U.S., said Bryan Strommen of Progressive Ag at Fargo, N.D.
Minneapolis spring wheat has also rallied, but its premium to the winter wheats was narrowing.
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“We’re in a war trading scenario,” Strommen said, noting the lack of a comparable situation in recent history has sent the markets “treading water in unknown waters… until we see some light at the end of the tunnel.”
Ukraine is also a major player in the world corn market, and with spring just around the corner Strommen questioned what the war would mean for planting the next crop.
Soybeans ran into some profit-taking on Wednesday, but have also seen sharp gains overall in response to the unrest with general strength in energy markets supportive for vegetable oils.
Brazil’s soybean harvest is moving forward after heat and dryness hurt production during the growing season. However, with all eyes on Ukraine, any news out of South America was only having a minor impact on futures.
“I haven’t heard anything about the (South American) weather for 10 days now,” Strommen said.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
