As reported yesterday, US wheat futures rallied after hitting 13-1/2-year highs over the past week, particularly on concerns that the Russian invasion of Ukraine and Western sanctions will continue to disrupt grain exports. from the Black Sea region. The same thing happened in the last few hours with corn and soybean futures.
“The prospect of grain export flows stalling for several months from the Black Sea is sure to attract new buying,” Rich Feltes, head of market outlook at US broker RJ O’Brien, said in a note. Other operators consulted by different media in Europe pointed out that most of the Ukrainian and Russian ports of the Black Sea and the Sea of Azov remained closed yesterday, although the great Russian grain export port, Novorossiysk, was operational. This, added to the fact that Russia and Ukraine account for around 29% of world wheat exports, 19% of world corn supply and 80% of world sunflower oil exports, gives a dimension that pressures could continue in prices in those markets.
In the case of corn, it also seems to have consolidated an increasingly higher floor. Yesterday, the May contract closed at US$271.94 per ton, with an increase of US$13 in the price. For soybeans, the May price closed at US$601,
while that of July was US$593.
Petroleum
For its part, oil traded again with strong increases. The price of a barrel of Brent from the North Sea for delivery in April ended up 3.12% at US$100.99, after hitting US$105.07. In New York, meanwhile, a barrel of WTI crude for delivery in April gained 4.5% and closed at US$95.72.
domestic look
The impact on the local square could also begin to stand out. In terms of foreign trade, and especially exports, four out of every US$10 that entered the country in 2021 in total –almost US$78,000 million–, were thanks to soybeans and corn and their derivatives. Exports of the main products related to soybeans and their by-products totaled US$23,032 million, with a rise of 60.2% in year-on-year terms (US$8,657 million), as a result of an increase in the amounts exported from 14.9% and an increase in export prices of 39.3%, according to official data.
Meanwhile, corn also stood out with shipments of just over US$9 billion, US$3 billion or 50% more than in 2020. It was the second most exported product, behind soybean meal and above the oil of the oleaginous.
Due to the impact on foreign exchange earnings, producers remain on the lookout. Added to this scenario is the setback experienced by the world’s main stock markets in the face of prospects of a tightening of monetary policy by the United States Federal Reserve.
As mentioned, Ukraine and Russia, as well as the United States and the European Union, are two of the world’s leading exporters, catering to importers such as Egypt, Indonesia and Turkey. Ukraine has 17% of world exports while Russia represents 24%, two points below the US Wheat is the cereal that would be most affected in the supply of the world’s economies. In this sense, Argentina could become a great supplier of demand and thus ensure a good income of foreign currency.
Source: Ambito
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