Wheat futures add to 14-year highs, up 32% so far this week (NYSEARCA:WEAT)

Chicago wheat futures rose by their daily limit Thursday to another 14-year high, powering past $11 per bushel for the first time since 2008 and capping a 32% gain so far this week, as the Russia-Ukraine war raises fears of a major disruption to grain exports from the Black Sea region.

Russia and Ukraine combined account for 25% of global wheat exports and Ukraine alone for 13% of corn exports, according to analysts at RBC Capital.

CBOT wheat for May delivery (W_1:COM) closed +7.1% to $11.34 per bushel, the highest for a most-active contract since March 2008 but still below the all-time high of $13.49 1/2 set in February 2008.

Most-active May corn futures (C_1:COM) also jumped by their $0.35 trading limit to settle +3.1% to $7.60 per bushel, and soybeans (S_1:COM) ended +1.2% at $16.84 per bushel; corn futures have climbed 14% this week and soybean futures are up more than 5%.

ADM, BG and ANDE are among many potentially relevant tickers; ETFs: WEAT, CORN, SOYB.

The current chaos out of the Black Sea will be “the biggest supply shock to global grain markets in my lifetime,” University of Illinois agricultural economist Scott Irwin has tweeted. “As just one data point: It has been reported that there are 600M bushels of corn contracted for export that is currently trapped in Ukraine. And what about 2022” production?

The disruption appears to be beneficial for U.S. suppliers, with the U.S. Department of Agriculture reporting the sale of 337K metric tons of U.S. corn to unknown destinations for delivery in the 2021-22 marketing year.

U.S. exporters “continue to find interest in the export market as traditional Black Sea buyers seek grains from other locations,” Doug Bergman of RCM Alternatives says.

Commerzbank analysts said recently that the Russia-Ukraine war means “as much as 15M tons of wheat exports from the Black Sea region could be at risk.”