Markets are sharply higher this morning with corn up 30 and soybeans up 65. Friday, the market sold off hard at the lack of teeth in the sanctions put against Russia. Today is a different day, and a different feeling.
Ceasefire talks between Russian and Ukrainian officials began on the Belarusian border on Monday as Russia faced deepening economic isolation four days after invading Ukraine. It was not clear whether any progress could be achieved after Russian President Vladimir Putin put Russia’s nuclear-armed units on high alert on Sunday.
The Western-led response to the invasion has been emphatic, with sanctions that effectively cut off Moscow’s major financial institutions from Western markets. Russia’s ruble currency plunged 30% against the dollar on Monday. Countries also stepped-up weapons supplies to Ukraine.
World corn and wheat trade will be disrupted, as will farming in the Ukraine. Infrastructure break downs and port problems will plague them for months.
Limit higher and lower moves appear to be the norm right now, but at some point this settles down and fundamentals will come back into play. Be careful not to get too complacent with these elevated prices as they could turn on us quickly.
Have a safe day!