Commodities Shuttle: On a day of war in Ukraine, commodities respond with high prices

The commodity market had a busy day on Thursday (24), after Russia invaded Ukraine. Wheat and corn, the cereals that have the most affected supply in this dispute, reached the high limits allowed in the stock exchange negotiations.

Wheat, which has Russia as the leader in world exports, reached US$ 9.26 per bushel (27.2 kg), reaching the high limit. The cereal, which ended the trading session at this price level, surpassed by 5.7% the values ​​of Wednesday (23). In the last week, when the tensions between the two countries increased, the accumulated high of the cereal is of 17% in the Chicago Stock Exchange.

This evolution occurs because Russia and Ukraine have great importance in grain production. The Russians produce 76 million tons of wheat and export 33 million. Together, the two countries are responsible for 29% of the world trade in this cereal.

Corn, which also reached a high limit — when this occurs, negotiations are interrupted, being resumed later — reached US$ 7.19 per bushel (25.4 kg), but ended the day at US$ 6. .95, up 1.6%.

Ukraine produces 42 million tons of maize and exports 36.5 million. Ukrainians and Russians hold 19.5% of the corn traded in the world.

​Soybeans, which followed other commodities earlier in the day, retreated and closed at $16.62 per bushel (27.2 kg). During the day, however, the oilseed was traded at US$ 17.65 per bushel.

The effects of this war in Eastern Europe affect Brazil in several ways. It raises the value of the dollar again, bringing external food inflation into the country.

In addition, rural producers, who are experiencing a period of cost readjustments, may experience even greater pressure from fertilizers. Russia is Brazil’s main supplier. The dollar should make the input even more expensive, and geopolitical sanctions could make supply difficult.