MarketsFarm — Russia’s invasion of Ukraine has done little to stabilize corn and wheat markets on the Chicago Board of Trade (CBOT) for the week ended Wednesday.
After high price spikes during the previous week, peace talks between the two nations and very few signs pointing toward escalation or resolution have brought on a recent downturn, among other factors such as funds moving toward equities.
“Wheat was pretty much overbought to begin with, but there’s still a lot of uncertainty in the grain markets, corn and wheat,” said Terry Reilly, senior agriculture futures analyst for Futures International in Chicago. Both Russia and Ukraine are among the world’s four largest wheat exporters.
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“We think a lot of business will shift to the (United States). The thing is we haven’t seen it, so that’s put pressure on prices,” he added.
Meanwhile, Argentina’s suspension of export registrations for soy meal and soyoil has been a major factor for soybeans, but weather is providing a bearish effect.
“We’re keeping an eye on major importers possibly stepping in and buying meal from the U.S. and also vegetable oils because the Black Sea (is having) problems getting sunflower oil out of that region,” Reilly said.
“But the weather did improve in South America, stabilizing the bean crop in Brazil and Argentina. Argentina’s harvest is just kicking in.”
Nevertheless, which direction the markets go depends on the latest news from Ukraine.
“Basically, it’s been headline trading over the past 20 days and we’ll just have to monitor the situation, monitor export commitments out of the U.S. and actual shipments. Until that significantly picks up, I think we’ll see a little bit of weakness in the grain and oilseeds markets,” Reilly said.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
