Grain market sorts for war in Ukraine

While the stock markets have rallied after Russian President Vladimir Putin's speech, commodity prices show a different picture. This applies to oil and metals, but also certainly to grains. Russia and Ukraine together account for 29% of the world's wheat exports, 19% of corn exports and 80% of sunflower oil exports. Traders fear that a military conflict will have major consequences for world trade in these products. Due to favorable conditions, Ukraine in particular had a good grain harvest for the 2021/2022 season and the prospects for next season are also favorable. But to benefit from this, the products must be able to be shipped.

Ships avoid the Black Sea
Reuters news agency reports that some buyers are already avoiding the Black Sea. Ships are sent to other ports. Traders do not want to run the risk of ships suffering major delays, or worse, due to a military conflict. A lot of grain from the Black Sea region goes to buyers in the Middle East and Africa. These buyers may look for other suppliers, which will affect the global availability of grain. For example, earlier this month, the US Department of Agriculture (USDA) predicted the smallest inventories in five years for wheat, and those inventory figures include supplies from Ukraine and Russia.

Grain quotations on the main stock exchanges are on the rise due to tensions in Ukraine. At the time of writing, the Matif is trading at €279,50 per tonne, an increase of more than 2% compared to the closing price of Monday, February 21. The American wheat quotation on the CBoT in Chicago has risen even faster, by approximately 2,5%. Corn prices show similar increases. Although the Black Sea region is a relatively small player in the soy field, the price is also affected. But with a plus of more than 1,5% on the CBoT, the increase is less strong.