Russia is not only a significant producer and exporter of wheat and other agricultural commodities. Russia is the largest exporter of fertilizers, including key nitrogen fertilizers. Russia's share in global exports is 13.3%. What does this mean for the markets?
Recipients of Russian fertilizers. Source: OEC
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Open account Try demo Download mobile app Download mobile appThe USA and Brazil produce huge amounts of corn and soybeans for the Chinese market. This is why the steep rise in wheat prices is also followed by soybeans and corn, which are near their all-time highs. Meanwhile Russia reports that it may face production problems and the authorities are advising producers to stop exporting. Of course, this is probably related to the willingness to punish the West with sanctions. Moreover, Ukraine accounts for approx. 13% of worldwide corn exports and is the 4th exporter after the US, Brazil and Argentina. Most of the corn from Ukraine goes to Europe and China. We are, of course, still a long way from harvest season, but there is a high probability that many crops will be damaged. Chart below shows that price of corn is still relatively low compared to the price of wheat.
The price of wheat is rising at a faster pace compared to corn. However corn crops may be exposed to significant losses. Source: xStation5
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