Wheat futures are down on reports that Russia is ready to create corridors for food shipments.
The most active contract declined 2.8 percent. Corn is near a six-week low.
Russia says it is ready to create humanitarian corridors for grain ships carrying food out of Ukraine in return for lifting some sanctions.
Joe Vaclavik joined us earlier on the Market Day Report and says he is sure there is already some liquidation taking place.
“If the United States and the West lift sanctions on Russia, it’s going to make it look like they’re going easy on Russia. But at the same time if they don’t, we’re going to deal with these high food prices and potential food shortages and that sort of thing. This issue with Ukraine all along to this point at least has been an issue of logistics and not production, so if we could get those Black Sea ports open, it would be a tremendously bearish item in my opinion at least, in regard to the corn market and the wheat market, but that’s a huge ‘if’. Is the West interested in lifting sanctions, when really it looks like we’re going in the other direction right now.”
Vaclavik added the wheat crop is already in terrible shape and they are at incredibly high prices, and seeing a sell-off of a dollar or two dollars is not precedented.
Related:
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War in Ukraine is causing the biggest grain dislocation since WWI
