It?s been one year since Russian tanks rolled into Ukraine and started a war that many thought would only last days or weeks. When the Russian invasion first began, commodity prices shot up significantly. However, Karl Setzer, commodity risk analyst with AgriVisor, said the ag markets have since stabilized.
?It’s definitely been muted here and the reason being is that the knee-jerk reaction was we’re not going to get any wheat and that’s where 20 percent of the world’s wheat supply comes from,? Setzer said. ?Corn will also be shut off. Now, here 12 months later, it’s the opposite. As a matter of fact, there is so much grain flowing out of the Black Sea region from Ukraine into the European Union, the EU wants it shut off because it’s just killing their domestic market.?
Setzer said that the war?s impact on Ukraine?s corn and wheat exports wasn?t nearly as dire as first predicted.
?More of the crop got out and more was harvested last year,? Setzer said. We’re going to see some decent production this year. It’s not going to be back to pre-war levels, but it is it’s going to be enough that when we add it into the rest of the global supply, it’s going to be a fair amount.?
That?s not to say that everything is peachy, though. Setzer said that the war is still creating huge challenges for Ukraine?s grain exports.
?Vessel loadings have slowed,? Setzer said. ?Only two-and-a-half vessels are being cleared from inspections per day. There has been some chatter that Russia is going to shut down the corridor. I don’t think Russia is going to do that. Russia is upset with the sanctions against them, and we knew they would be. The thing is Russia doesn’t want any new sanctions either, so that’s going to help keep that corridor open.?
Setzer added that the ag markets have also stabilized because of expectations that this war could last for quite some time.
?This could be a long drug-out war,? Setzer said. ?When you have that, the market does tend to just kind of look away after a bit. That has started to happen here barring some huge Black Swan event?and when you’re dealing with countries like Russian and Ukraine, you cannot rule that out.?
Grain exports out of Ukraine are down nearly 29-percent compared to this same time last year right before Russia?s invasion.
