The Russian invasion of Ukraine is threatening the world’s supply of agricultural commodities and fertilizer inputs, increasing energy prices, and disrupting the global supply chain.
Why it Matters: Ukraine is the world’s top five largest producers of wheat, a large producer of corn, and leads the world in sunflower and rapeseed exports. Russia produces a significant percentage of the world’s fertilizer inputs including ammonium nitrate and potash.
The conflict will delay the Ukrainian planting and harvesting seasons. Conditions should remain positive for commodity prices for the remainder of the year.
U.S. corn exports are likely to benefit in the short term, and the demand for soybeans and soybean oil is expected to increase.
Yes, but: Higher grain prices will be offset by higher fuel and fertilizer costs. Brent crude prices are expected to remain above $100 per barrel for the foreseeable future. Fertilizer prices are expected to keep rising as a result of production disruptions in both Russia and Ukraine, supply chain pressures, and trade sanctions.
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