Wheat surged as mounting tensions over Ukraine stoked concern about the outlook for grain shipments from Eastern Europe.
Futures in Chicago climbed as much as 4.4 percent, while contracts tied to corn and soybeans also rose in Chicago, as the US said intelligence indicates Russia might attack Ukraine before the Olympics end on Sunday next week.
Moscow has said it has no intention of invading.
Photo: Reuters
Ukraine and Russia are heavyweights in wheat, supplying more than one-quarter of the world’s shipments of the grain. They also play a big role in global corn and sunflower oil. A protracted discord in the region could keep prices of such commodities elevated and add to food costs that are already the highest in a decade.
While a direct conflict might initially see a liquidation in positions to take risk off, the “ultimate issue for wheat would be bullish for prices,” said Rich Nelson, chief strategist at US-based Allendale Inc.
In wheat options, implied volatility on contracts for next month jumped from 32 percent to 48 percent on Friday, with overall volume up about 60 percent.
Benchmark futures in Chicago for May delivery climbed the most in more than four months, before pulling back to end the day up 3.2 percent at US$8.04 a bushel.
The Bloomberg Agriculture Spot Subindex neared an all-time high earlier this week as the outlook for soybean and corn crops in South America continue to dim.
Prices across grains, oilseed and soft markets have all rallied recently as supply shortfalls abound, a signal that food inflation already hitting consumers worldwide is likely to continue.
More bullish signs for soybeans emerged on Friday with a new South American forecast. Soil moisture in Brazil’s south is likely to keep falling in the next 10 days amid dry conditions and high temperatures, worsening conditions for still-developing crops, Climatempo meteorologist Celso Oliveira said.
Meanwhile, Cocoa slid from a two-year high as traders weigh the impact of adverse weather in key growing regions.
Futures declined 0.8 percent to US$2,811 a tonne in New York on Friday.
The drop comes after a three-day rally — fueled by expectations of better chocolate sales in Europe and concerns about weather conditions in key West African countries — pushed prices to the highest since February 2020 on Thursday.
For the week, cocoa gained 3.2 percent.
“The market overextended itself on hype about dry weather in West Africa and is now correcting from that,” J. Ganes Consulting LLC president Judy Ganes said.
Arabica coffee posted a second straight weekly gain, even after falling in the past two sessions amid appreciation in the Brazilian real
Other commodities:
‧Gold for April delivery rose US$4.70 to US$1,842.10 an ounce, up 1.9 percent from a week earlier.
‧Silver for March delivery fell US$0.15 to US$23.37 an ounce, gaining 3.96 percent weekly, while March copper fell US$0.15 to US$4.51 a pound, posting a weekly increase of 0.45 percent.
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