By Wyatte Grantham
The collapse of a major dam in southern Ukraine sent global prices of wheat and corn higher early Tuesday.
Wheat prices gained 2.4 percent in early trading Tuesday at the Chicago Mercantile Exchange, to $6.39 a bushel. The cost of corn rose more than 1 percent (to $6.04 a bushel) and oats gained 0.73 percent ($3.46 per unit). Prices were higher earlier in the day, but faded.
The destruction of Kakhovka dam and hydroelectric power station, which sits on the Dnieper River in an area that Moscow controls, raised anxiety about a potential disruption to global supplies.
“Ukraine has historically been one of the major exporters in the world wheat market,” Joe Janzen, assistant professor at University of Illinois Urbana-Champaign’s College of Agricultural, Consumer and Environmental Sciences, told The Associated Press, also pointing to the country’s historic corn production. “Anytime there’s news out of that part of the world, the market is sensitive to that.”
It’s possible that we’ll continue to see temporary jumps in prices following significant news events, like what was seen after the destruction of Kakhovka dam, but Janzen says circumstances are key — and expectations for commodity exports out of Ukraine will likely “continue to diminish as we recognize that Ukrainian production will continue to be severely impaired because of the war.”Click here to see more...