According to a recent Bloomberg News report, U.S. wheat and corn prices recently soared as tensions in Ukraine, a leading exporter of both grains, escalated, creating a potential for supply distractions.
Wheat climbed the most since 2012, as futures for May delivery jumped 4.9%, reaching $6.315 a bushel on the Chicago Board of Trade. Corn futures for May also soared, climbing 1.5% to $4.705 a bushel, the highest number since September. Ukraine is set to be the third-largest corn shipper this year and is expected to boost wheat exports to 9.5 million metric tons, up from 7.1 million a year ago. However, current unrest in Ukraine has raised concerns and driven U.S. grain prices to higher levels.
Stephen Pope, managing partner at Spotlight Ideas, was quoted in a MarketWatch post, saying, “Clearly with the potential for disruption to supplies given the standoff between Kiev and Moscow any reaction of supplies from the Ukraine would place greater pressure on the demand from other sources, notably the U.S., Canada and Australia. The price action this morning clearly indicates that the commodities market is deeply concerned that tensions between Russia and Ukraine [have] the potential to impact export activity.”
As the situation in Ukraine plays out, U.S. wheat and corn prices could be impacted, as Ukraine is set to be a large player in worldwide grain exports this year.