Glimmers of peace in Ukraine are curbing speculation on wheat and corn prices, as well as on those of energy commodities. The price of wheat and corn is reversing the upward trend of recent weeks, falling sharply to the lowest values of the last month.
On the occasion of the ongoing peace talks in Turkey between Russia and Ukraine, the Italian farmers’ association Coldiretti analyzed the prices trends at the Chicago Board of Trade, the world reference point for agricultural commodities. The most active wheat futures contract fell to $9.76 per bushel (equal to 27.2 kg) after having exceeded $13.6 per bushel in the first month of the war. Corn was quoted at $7.17 after reaching $7.8 per bushel (the highest price in the last 10 years).
“We are facing a clear reversal of the price trend – says Coldiretti – due to expectations on reaching an agreement between Russia and Ukraine and overcoming difficulties in sowing and international trade of cereals. Without neglecting the blocks to exports and transport, which in recent times have also affected the availability of fertilizers needed for cultivation”.
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WHEAT AND CORN PRICES FROM ITALY’S POINT OF VIEW
Russia and Ukraine together control 28% of world production and sales of soft wheat for bread making, 16% of the corn trade for animal feed, and 65% of sunflower seeds oil used for the production of sweets, preserves, sauces, mayonnaise, spreadable condiments, and fried food (source: Divulga research firm). Should the war end, spring sowings in Ukraine would be possible – but they risk being made on an area of 7 million hectares compared to 15 million before the invasion by Russia.
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The international emergency directly concerns Italy, which imports 64% of its wheat requirements for the production of bread and cookies and 53% of the corn it needs for livestock feed. Rising corn and soybean prices are putting Italian livestock producers in a difficult position, as they face cost increases of +57%.
Italy imports from Ukraine just 2.7% of soft wheat for bread making, for a total of 122 million kilos, but also 15% of corn for animal feed, for a total of 785 million kilos (source: Coldiretti analysis on Istat data for 2021).