Wheat, soybeans hit nine-year highs as Russia invades Ukraine
U.S. wheat and corn futures rose by their daily trading limits on Thursday, while soybeans scaled the highest since 2012, as Russian forces fired missiles at Ukraine and landed troops on its south coast, exacerbating worries over global supplies.
Wheat rose for a third day, scaling its highest in more than nine years, while corn climbed to a fresh eight-month peak.
Shortly after Russian President Vladimir Putin spoke in a televised address on state TV on Thursday, explosions could be heard in the pre-dawn quiet of the Ukrainian capital of Kyiv.
Putin has authorized a military operation in eastern Ukraine in what appeared to be the start of war in Europe over Russia’s demands for an end to NATO’s eastward expansion.
“Heightened tensions around Russia-Ukraine and a fair amount of uncertainty over Russian supplies over the coming months have prompted traders to keep their grain at home rather than shipping it overseas,” ING commodity strategists said in a note.
With Russia and Ukraine accounting for around 29% of global wheat exports, 19% of world corn supplies, and 80% of world sunflower oil exports, traders were worried that any military engagement could impact crop movement and trigger a mass scramble by importers to replace supplies from the Black Sea region.
“Russia-Ukraine tensions exacerbated supply risks for the global market,” the ING strategists said as they cited still-soft wheat exports from the European Union.
The most-active Chicago Board of Trade May wheat contract soared as much as 5.7% to $9.34-3/4 a bushel, the highest since July 2012.
Corn was up 4.7% at $7.13 a bushel, as of 0448 GMT, having hit limit-up at $7.16-1/4, its loftiest since June 10.
May soybeans gained 1.6% to $16.97 a bushel, advancing for a sixth session. Earlier, it hit its highest since September 2012 at $17.19-1/2.
In China, soymeal futures rallied to a record high even as the government plans to release soybeans from reserves amid worries over tight supplies in the market.