The climb in the conflict between Russia and Ukraine, two major exporters of agricultural commodities, led to a jump in grain prices in the Chicago marketwhich placed soybeans above US$600 per ton and wheat above US$310.
In this way, the increase in tensions with the deployment of Russian troops in Lugansk and Donetsk after the Kremlin recognized its self-proclaimed independence from Ukrainebut whose sovereignty has been claimed by the latter since 2014, led the oilseed to reach its highest value in 9 months.
“The markets of commodities In general, they are very hot and the tensions between Russia and Ukraine add fuel in this sense,” the head of the Market Analysis Department of the grain broker Grassi, Ariel Tejera, told Télam.
In this regard, Tejera considered that, added to the conflict, the rise in prices finds strong support in the fact that “the cuts in the projections of South American soybean production they would be putting overall offer on the ropes and would lead the world to work with very strained balance sheets for the remainder of the current business cycle.
“At the same time, the segment speculative is also playing its part, with a large bullish bet, given this context,” said the specialist.
Thus, March and May soybean contracts rose 2.09% (US$12.31) and 1.96% (US$11.57), respectively, to US$600.76 per ton.
In this way, the Rosario Stock Exchange (BCR) focused on the Russian-Ukrainian crisis, especially because “the importance of the Black Sea region in the sunflower oil trade leads to important rises in soybean complex products, with special relevance to soybean oil and vegetable oils in general, since Ukraine and Russia account for about 60% of the production and 80% of the world trade in sunflower oil”.
For its part, the grain broker Granar, in its analysis of the day in Chicago, maintained that the continuity of the rains over the center-west of Brazilwhich “are slowing down the soybean harvest, with all that this may imply for the quality of the grains.”
Soybean by-products accompanied the upward trend in the beanwith a jump in oil of 3.81% (US$ 56.88) to US$ 1,546.53 a ton, while flour advanced 1.29% (US$ 6.39) to conclude the day at US$ $500.11 a ton.
The wheat also concluded operations with strong increases and thus, the March contract rose 5.92% (US$ 17.36) and stood at US$ 310.21 per ton, as a consequence of the growing tension in said conflict that “is leading to redirect purchases of wheat, corn and oil of sunflower to alternative destinations.
Russia and Ukraine respectively occupy the first and third place in wheat exports“holding close to a third of the world cereal market,” the BCR remarked.
This generated expectations in the American operators regarding “potentials hikes in the demand for North American wheat, which underpins prices with special impetus in Chicago”.
For their part, the Granar analysts indicated that it was necessary to pay attention to how the cereal market will continue in the coming days, since there the Chicago operators will give “their verdict as to whether these first penalties (from the United States to Russia) are relevant to them or if they are less than expected in the midst of the hectic buying wave of contracts before the closing and before the sayings of Joe Biden “.
“At the moment, what was announced doesn’t seem as relevant as expected by speculators,” they said.
Lastly, corn gained 3.13% (US$8.07) and stood at US$265.64 per ton, also due to the conflict, taking into account that Ukraine is the world’s fourth largest exporter of corn.
“Potential fears of non-compliance with shipments discourage trade in the Black Sea area and push prices up“, highlighted the Rosario stock market entity.
The new weekly report of the United States Department of Agriculture (USDA) on the inspection of shipments also contributed to the improvements, given that on Tuesday it revealed shipments of corn for 1,576,666 tons, above the 1,455,693 tons of the previous report. and close to maximum predicted limit by the private ones in a range that went from 1 to 1.75 million tons.
