Russia and Ukraine account for 30% of global wheat exports, of which 2/3 delivered by Russia
Tethered to the outcome of ceasefire talks, the volatility of Chicago wheat futures offers a muddled picture - with price increases topping 50% early March over January '22 before pulling back
With the suspension of commercial Black Sea port loadings in Ukraine, and limited deliveries by rail through Western borders, the country's share in global exports (10%) is at risk
While Russia's Black Sea terminals are operational, shipments may be hampered by trade finance restrictions, introducing additional factors of uncertainty
The ability of traditional large exporters - the EU and the U.S. - to cushion price swings has been constrained over the past years by falling stocks, related to subsidy reforms and shifts towards corn and soybean
Wheat stocks of the major exporters outside Russia and Ukraine - European Union, the U.S., Canada, Argentina, Autstralia and Kazakhstan - are at a nine-year low of 45.6 million tonnes by the end of the 2021/2022 season representing 16% of global wheat stocks, according to the International Grains Council
With total world consumption estimated at 781 million tonnes, stocks by these majors would cover world needs for only 3 weeks, making it hard to compensate for a sever drop of Ukrainian shimpments
Wheat stocks at the end of the current season will be dominated by China , which at 131 million tonnes almost doubled its wheat holdings since 2004/2005, reflecting the country's focus on food security