International Desk: Chicago wheat futures rose by more than 6% yesterday to 14-year highs on concern global supplies will be disrupted until the Russia-Ukraine conflict is resolved.
Russia and Ukraine together account for about 29% of global wheat exports, as well as 19% of corn exports.
Since Russia launched the campaign it calls a “special military operation” on Feb. 24, commodity markets have surged.
The wheat market rose over 40% last week, its biggest weekly rise on record, and on Monday hit its highest since March 2008 at $12.60-1/4 a bushel. Chicago Board of Trade most-active wheat rose 6.6% to $12.53-1/4 a bushel at 0927 GMT.
Corn on Monday rose 2.7% to $7.75-1/4 a bushel, soybeans rose 2.1% to $16.95-1/2 a bushel. Corn and soybeans are around their highest since September 2012.
“Until the fighting in Ukraine ends, it cannot be expected that wheat and corn exports from Ukraine and Russia will resume,” one European trader said on condition of anonymity. Russia and Ukraine also provide 80% of the world’s exports of sunflower oil, which competes with soyoil.
Ukrainian ports remain closed and dealers are reluctant to trade Russian wheat after Western sanctions, so buyers are seeking alternative suppliers.
Export demand for European Union wheat surged last week and is expected to continue to rise.
“With such a sudden run on other sources, there is worry that some countries will introduce export restrictions to stop their own domestic supplies being sucked away,” another trader said, but added some big importers were still willing to buy for fear prices will rise further.
Bulgaria’s government said it will expand wheat reserves, while producers fear an export ban.
Already, Hungary has banned all grain exports with immediate effect because of the price increases.
Major wheat importer Algeria on Sunday issued an international tender to buy milling wheat.
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