CBOT wheat has led the charge, gaining 55% over the past month, with European wheat up 41% and UK 36%, finds CRM Agri.
“The market was clearly caught out by Russia's invasion of Ukraine, with funds net short on wheat there was a scramble to square positions, causing multiple limit-up days and surging global prices. For now, the panic seems to have subsided and markets have stabilised or corrected lower for wheat.”
Big questions remain over Ukrainian spring plantings and indeed winter plantings, with uncertainty as to how long the conflict will endure and the lasting implications for yields and trade, note the UK analysts, echoing comments made by ADM oilseeds lead, Greg Morris.
Corn production
“Following Russia's invasion, market concerns from a feed grain perspective are twofold, old crop markets will continue to require imports of corn, and looking ahead to 2022/23, Ukraine production outlooks are at risk. Corn planting in Ukraine begin in May, meaning at this stage it can only be assumed plantings will be sharply reduced, amplifying tight global stocks,” said the UK grain and oilseed market specialists.
Major importers, according to CRM Agri’s review of the markets, are already making plans to fix alternative supplies of both grains and fertiliser.
Looking at how the situation stands for oilseeds, the CRM Agri team anticipates that rapeseed oil in 2022/23 is likely to remain at a premium to alternative vegetable oils, alongside strong demand for rapeseed meal.
Aside from the ongoing turmoil in Ukraine, the USDA also published its March WASDE this week. Sharp cuts were made to both Brazilian soybean production and US stocks of corn.
“The ongoing crisis is expected to push demand towards the US and South America,” predicts the CRM Agri team.
