Wheat, Soybeans Hit Fresh Highs Amid Russia-Ukraine Conflict

(Bloomberg) -- Wheat and soybeans led a broad rally of crop futures as traders focus on the political conflict between major grain exporters Russia and Ukraine, as well as drought risks to dwindling South American yields.

Grain and oilseed prices have been on a tear as escalating tensions between Russia and Ukraine spark fears that shipments could be disrupted from the nations. Any upsets to shipments could drive up food costs at a time when prices are already at a decade high.

Meanwhile, dry weather conditions have parched South American harvest areas, dimming the yield outlook in key growing regions like Brazil, the world’s No. 1 soybean grower and shipper.

Wheat futures in Chicago climbed as much as 4.2% to $8.8875 a bushel, the highest since late 2012, before settling at $8.8475. Hard red winter wheat touched a nine-year high. 

Soybeans rose as much as 2.5% to $16.75 a bushel, the highest for a most-active contract since 2012 before closing the trading session at $16.71. Soybean oil also touched its highest price high since 2008.

When relief from high crop prices could come is unknown. “It’s tough to stay what’s going to happen,” said Karl Setzer, analyst at AgriVisor LLC. “How bullish the market gets depend on how long this issue lasts.”

Buyers are hopping on the commodities bandwagon and flooding the markets with cash, incentivized by the prospect of profits brought on by inflation.  

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