Paris wheat hits record, corn surges as attack risks supplies

Bloomberg

Grain markets catapulted even higher as Russia’s attack on Ukraine put a vital source of global supplies at risk.
Wheat surged by the maximum allowed by the exchange, and corn earlier did the same. Milling wheat traded in Paris soared as much as 16% to a record, and oilseeds also bounded higher, heightening concerns of a further acceleration in global food inflation.
Russia launched a barrage of missile, artillery and air attacks, triggering the worst security crisis Europe has witnessed in decades. Ukrainian sea ports closed, according to the presidential office, throwing commodity exports into chaos. Top wheat buyer Egypt, which mostly gets supplies from the Black Sea area, was forced to cancel its latest tender to import the grain.
“It’s a lot easier to hit a daily limit in the overnight when sellers are reluctant to be involved in the market,” said Arlan
Suderman, chief commodities economist for StoneX Financial Inc., said by phone. “We’re seeing the adjustment of the markets and now reestablishing under normal day volumes what the fair market value is.”
The conflict leaves major crop importers particularly vulnerable, with Ukraine and Russia supplying a vast array of countries spanning Asia to the Middle East to Africa. Egypt canceled its wheat tender after drawing a lone offer — of French grain. It had been flooded with participants in another tender just a week earlier.
Ukraine still has about 6 million tons of wheat and 15 million tons of corn left to ship this season, Magdovitz said. While buyers can turn to other origins like the US and European Union, its role in the market is “irreplaceable,” he said.
In addition to the crisis, drought in South America has dimmed the outlook for soybean supplies, sending futures to a nine-year high. Palm oil, which is used in thousands of products from cookies to shampoo, is on a record-breaking run as a labor shortage crimps output in major producer Malaysia.
That could feed through to higher prices at grocery stores as everything from pasta to chocolate becomes more expensive to produce, further squeezing household budgets. A measure of global food costs calculated by the United Nations approached a record in January.
Ukraine and Russia account for more than a quarter of the global trade in wheat and about a fifth of corn sales and 80% of sunflower oil exports.