- Ashwin's 113 powers India to 376 in Bangladesh Test
- Biden opens home to 'Quad' leaders for farewell summit
- Sally Rooney returns with 30-something questions
- Wallabies sense 'massive' chance to upset All Blacks
- Taiwan questions two in probe into Hezbollah pagers
- Viral Korean Olympic shooter scores first acting role as assassin
- Farrell set for 'challenge' of downing Bordeaux in Top 14
- Springbok Etzebeth diverts attention from looming caps record
- Inter on a high ahead of Milan derby as Napoli face Juve test
- Bank of Japan leaves key interest rate unchanged
- Arnold quits after six years in charge of Australia
- Asian markets track Wall Street record to extend global rally
- Guirassy and Anton to return to Stuttgart with new side Dortmund
- Marseille bidding to continue 'almost perfect' Ligue 1 start
- Arnold quits as coach of Australia men's football team
- Harris and Oprah hold star-studded US election rally
- Allies to remember failed WWII parachute operation
- Perez leading new-look Villarreal charge against leaders Barca
- Man City face Arsenal in Premier League title showdown, Postecoglou under pressure
- Fake celebrity endorsements, snubs plague US presidential race
- Documentary brings Argentine 'death flights' to the big screen
- Strike shows challenge to Boeing 'reset' of labor relations
- World leaders to gather at UN as crises grow and conflicts rage
- How plastic pollution poses challenge for Canada marine conservation
- Scientists track plastic waste in pristine Canada marine park
- South Africa's Buhai grabs LPGA Queen City lead
- Japan inflation firms to 2.8% ahead of BoJ rate decision
- Russia's Kadyrov accuses Musk of 'remotely disabling' his Cybertruck
- Titan sub had to abort a dive days before fatal implosion: testimony
- Ohtani makes MLB history with first 50-homer, 50-steal season
- Ohtani eyes MLB history after surpassing 50 stolen bases, 49 homers
- Ohtani eyes MLB history after surpassing 50 stolen bases
- Barca downed by Monaco as Arsenal held in Champions League stalemate
- Head's 'good night at office' after century seals win over England
- Dubois seeks legitimacy with Joshua scalp
- Rate cut could lift consumer spirits before US elections
- Last-gasp Gimenez strike sends Atletico past Leipzig
- Barca stumble at Monaco after early red card
- Raya heroics save Arsenal in Champions League opener at Atalanta
- Cathay Airbus engine fire linked to cleaning: EU regulator
- Guardians beat Twins to secure MLB playoff berth
- Jihadist attack in Mali capital killed more than 70: security sources
- Alonso hails 'efficient' Leverkusen after Feyenoord rout
- Head's hundred seals Australia win over England in 1st ODI
- Ex-Man United striker Anthony Martial joins AEK Athens
- NFL unbeatens meet as Texans visit Vikings, Steelers host Chargers
- Head's hundred seals Australia win over England in 1st ODI after Labuschagne strikes
- Dream debut for Wirtz as Leverkusen thump dire Feyenoord
- Myanmar flood death toll climbs to 293: state media
- Israel army says West Bank air strike kills 4 militants
Wheat and corn prices ride the Ukrainian rollercoaster
The crisis between Ukraine and Russia, two of the world's biggest wheat and corn producers, has sent the commodities' prices on a wild ride -- with anything from a diplomatic statement to rumor of a maritime blockade roiling markets.
Usually much less volatile than stocks or oil, agricultural commodities are now often subject to spectacular spikes and drops.
"The market doesn't know nuance: Either it's war and it goes up, or it's peace and it goes down," said Gautier Le Molgat, an analyst at Agritel.
The grains' markets turned around three times in less than 24 hours this week: First on the Russian foreign minister's optimistic tone Monday, then on news of the United States relocating its Ukrainian embassy, and finally on Moscow's claims of a military pullback.
The stakes are especially high for wheat, with Russia being the world's top exporter and Ukraine the fourth, according to estimates by the US Department of Agriculture (USDA).
Together, the two countries account for almost a third of wheat's world trade.
On the corn side, Ukraine ranks fourth among exporters and accounts for approximately 22 percent of trade.
To date, however, the Russian army's movements have had little effect on Russian or Ukrainian exports.
While global wheat prices surge, Ukraine has seen its own rates fall by four percent over the last month, according to S&P Global Platts.
"If we remain in a latent conflict, volatility will remain in place and Russia and Ukraine will be losers in this," Le Molgat said.
"Their currencies will depreciate and few will risk buying from a distant origin without guaranteed delivery."
Ukraine is also the top sunflower oil exporter, with Russia a close second.
"We did see some customers that were pulling back buying sunflower oil from Ukraine, because they had worries about whether they would be able to deliver if they're involved in a military conflict with Russia," said Arlan Suderman, chief commodities economist at StoneX Financial.
However, according to Scheve, "over time, (such a latent crisis) would just be accepted as it's the risk that you face."
"And then until the problem rears its head again, that wouldn't necessarily put a premium on prices."
He also pointed out that exports from Ukraine and Russia traditionally slow down in March, "so that might be less of an issue."
- Blockade and embargo -
Those involved in commodities trading have a worst-case scenario in mind.
Were conflict to arise and Russia block the port of Odessa, Ukraine would have trouble exporting, Le Molgat said.
"In such a situation, one can imagine that there will be economic sanctions. The United States could thus decide to prohibit the trade of Russian wheat in dollars," he said.
Apart from Ukraine and Russia, the countries the most impacted would be their biggest customers, namely Egypt, Turkey, Indonesia and Morocco, which would be forced to find wheat elsewhere, probably at a higher price.
On the supply side, the European Union, United States and Australia, the other major players in terms of wheat, would be major benefactors of the disruption.
The exceptional uncertainty and volatility in the agricultural markets is a huge draw for investors. Earlier this month, the amount of short wheat positions (bets on price dropping) rose to levels not seen since July 2020.
In recent days, Teucrium, which manages ETF funds tracking agricultural commodities, has recorded inflows from investors looking to benefit from the price hike, said managing director Jake Hanley.
A diplomatic end to the crisis or the continuation of status quo in Ukraine would provide market relief, by all accounts, but prices could remain high.
Wheat and corn are currently 22 and 18 percent above their prices this time last year respectively.
The upcoming US wheat crop is threatened by a drought in the southern Plains, while corn crops are also expected to suffer from lack of rain in Argentina and Brazil.
"There's been so much focus on Russia, Ukraine," said Suderman, "that the global markets have pretty much lost touch with some of the other issues around the world."
O.Lorenz--BTB