Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Wheat and corn volatility ahead as Black Sea Grain deal expiry approaches

Wheat and corn prices come into focus as Russia consider whether to extend the Black Sea Grain deal

Source: Bloomberg

Putin proclaims victory as Russian Wheat exports surge

Russia has somehow managed to dramatically increase their wheat exports according to President Putin in today’s wide-reaching address. The fact that the country has produced previously unthinkable levels of output will undoubtedly have much to do with their military operation undertaken over the past year. Ukraine is a particularly important country from an agricultural perspective, accounting for 12% of all corn exports and 9% of the wheat exports.

While those two markets have experienced plenty of volatility since the inception of the war, the Russian influence is different across the two countries. That comes down to the location of the regions being controlled as we can see below. Russia currently dominates the Eastern regions, spanning from Kherson to Luhansk.

Black Sea Grain deal renewal comes into view

Part of the reason we have seen some stabilization comes down to the fact that Russia ultimately signed the Black Sea Grain deal which allowed Ukrainian exports to leave ports unhindered. That comes back into question over the coming month, with the agreement due to expire on 18 March. That could yet spark a fresh bout of volatility should we see signs of a potential breakdown in talks.

Wheat

Putin has focused on Wheat for a reason, with Russia having overtaken a region of Ukraine that accounts for roughly 20% of their Wheat production. The image below highlights how Wheat production is heavily weighted towards the East, which means that output will flow into maintain Russia rather than out of Ukrainian ports. In any case, it is notable that the current conflict zones are in the middle of this key production zone, bringing the potential for further volatility in prices going forward.

Despite the initial volatility seen as the Russia-Ukraine war sparked supply concerns, we have seen things settle down since. Traders should keep a close eye on Black Sea Grain deal as a potential spark of volatility ahead. For now, we are seeing price head lower on news of record Russian output. Coming off the back of a rise into the $8.01 resistance level, there is a chance we see price head lower towards the key $7.20 support zone. To the upside, a break through $8.01 resistance level would provide the basis for a more protracted move higher.

Source: ProRealTime

Corn

Corn prices have been less impacted by the Russian invasion, with production typically taking place in central Ukraine. However, with the grain deal renewal key to allowing continued Ukrainian exports, any inability to maintain that deal will likely have a particularly notable impact on corn exports.

The daily chart highlights how we have seen corn consolidate into a symmetrical triangle formation following a strong December rebound towards the 76.4% resistance level. A push through this $6.87-6.91 zone would bring about a bullish continuation, signalling a likely push up towards the $7.09 region. To the downside, a move through $6.67 support would raise the likeliness of another move lower to build on the October/November selloff.

Source: ProRealTime

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access
Learn more

Related articles

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.