The interruption of grain flows from the Black Sea region would mean that importers have to look for alternatives, such as wheat from the European Union and the United States. This would increase spending on fuel and inflate food prices.
Ukraine is expected to be the world’s third largest exporter of maize in the 2021/22 season and the fourth of wheat, according to data from the International Grains Council. Russia is the world’s leading exporter of wheat.
“There is no way of knowing how the conflict between Russia and Ukraine will affect the flow of wheat out of the Black Sea region, but the operations are adding a risk premium in the wheat market just in case,” said Tomm Pfitzenmaier, analyst at Summit Commodity Brokerage. “Some of that strength is moving into the corn market.”
In other news, six of Ukraine’s main Black Sea ports have restricted grain loading due to bad weather, the state port authority said on Tuesday.
Soybeans also rose as traders weighed mixed South American crop prospects and signs of good demand for US supplies.
The rains of recent weeks in Argentina put a “bombshell of water” in key agricultural areas of the northwest of the province of Buenos Aires, according to the Rosario Cereal Exchange, after the drought affected crops.