MarketsFarm — Russia’s incursion into Ukrainian territory, which has intensified an already tense standoff between Russia and the West, has had a bullish effect for grain prices on the Chicago Board of Trade (CBOT) during the week ended Tuesday, according to Scott Capinegro of Barrington Commodity Brokers at Lake Barrington, Ill.
The March corn contract closed Tuesday at $6.7475 per bushel, 36.75 cents higher than the close one week earlier (all figures US$). During the same period, March soybeans closed at $16.35/bu. for a weekly rise of 83.75 cents, while the March Chicago contract for wheat — a crop for which Russia and Ukraine are both major exporters — closed at $8.4425/bu., 64.5 cents higher than the week before.
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While corn prices may ease off due to upcoming rains in South America, Capinegro said any bit of news from Eastern Europe can cause sudden price spikes in corn, wheat and soybeans.
“(If) anything overnight happens, this market explodes,” he said. “It’s an awful tough atmosphere to pick a high and the problem in Ukraine is not going to go away quickly.”
Another factor which could have minor effects on prices is the U.S. Department of Agriculture’s Agricultural Outlook Forum on Thursday and Friday, at which USDA gives preliminary acreage estimates. Capinegro added that prices for soyoil, due to its use in biofuels, can in turn influence soybean prices.
However, as long as the conflict continues, it will have an unpredictable effect on markets.
“The thing is, if (Russian forces) continue to go into Ukraine deeper than anybody thought, what are they going to do with (Ukraine’s) shipping lanes? That’s the key,” Capinegro said, also warning that high prices won’t last forever.
“If there’s no disturbance on (Ukraine’s) exports, we’re priced too high (right now).”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
