Recent months have seen unparalleled volatility across soft commodity markets. Responding to increasing demand on part of our clients, we at ThinkMarkets are happy to deliver to your desktop and mobile devices the ability to trade CFDs on Wheat, Corn, and Soybeans.
After the outbreak of the Ruso-Ukrainian war, grains have become one of the hottest asset classes for trading this year. With both Russia and Ukraine being among the major producers of food in the world, prices have initially skyrocketed, only to recently pull back on rich crops in Europe, the U.S., and Brazil.
Supply issue notwithstanding, traders of soft commodities should pay attention to the latest developments in the Ukrainian conflict, as well as extreme weather events that can easily disrupt the market.
Wheat
Solid early wheat harvest in the U.S. and Europe weighed on the market, and commodity funds have covered their long positions put on in the aftermath of the outbreak of the first major war in Europe in the 21
st century. Recently, Russia-focused agriculture consultancy Sovecon raised its forecast for Russia's 2022 wheat crop by 0.6 million tonnes to a record high of 89.2 million tonnes. Is this supply enough to keep a lid on prices, or will the reduced ability of Ukraine to export its agricultural produce this year offset better crops elsewhere?
Corn
The U.S. Department of Agriculture rated 70% of the corn crop as good-to-excellent in its weekly report, in line with the average estimates from analysts. While Brazilian farmers are expected to harvest a bigger second corn crop this season than previously forecasted, Ukraine remains a factor, driving corn and ethanol prices higher over recent months.
Soybeans
The most important soft commodity used as animal feed, soybeans is another Commodity funds recently unloaded their soybeans long positions, sending prices into a tailspin over recent weeks. Forecasts for cooler weather in late June and early July, a key crop development period in the U.S. Midwest, has kept a lid on prices.
Soft commodities and grains are likely to continue to be volatile due to the increased uncertainty around the Ukrainian conflict. Analyse the markets based on the latest geopolitical developments and take advantage of trading soft commodity CFDs with ThinkMarkets.
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.