Ukraine question makes for volatile grain markets

Grain markets continue to be extremely volatile, amid ongoing uncertainty about the potential impact of the political upheaval in Ukraine.

“There has been much speculation about the effect the situation could have on Ukrainian exports, which to date appear to have continued unhindered,” said Jonathan Armitage, head of agribusiness at Bidwells. “There is also concern that spring plantings may be affected by a lack of available cash/credit advanced by banks to pay for seed and inputs.”

Other market factors had taken a back seat, but remained mildly supportive, he added. “Dry weather persists in the US Southern Plains where the hard red winter wheat crop is grown, and there are also concerns that Ukraine and Australia are too dry.” Physical demand for wheat and maize globally was strong, with both US and EU export sales steaming ahead, and major exporters’ stocks diminishing fast.

Oilseed rape markets had also been fluctuating wildly, with China’s cancellation of large soya bean cargoes putting Chicago futures under pressure, said Jonathan Lane, trading manager at Gleadell. “The Brazilian harvest continues with average yields reported and no major problems – and in Europe the physical market remains quiet.” Spot values were £2.50/t weaker on the week, at about £320/t ex-farm.