Chicago wheat futures rose over seven per cent on Monday, hitting 14-year highs on concern global supplies will be disrupted until the Russia-Ukraine conflict is resolved.
Russia and Ukraine together account for about 29 per cent of global wheat exports and 19 per cent of corn exports.
Since Russia invaded Ukraine on Feb. 24, commodity markets have surged.
Wheat markets rose over 40 per cent last week, the biggest weekly rise on record. Chicago Board of Trade most-active wheat rose 7.2 pre cent, up by the daily limit of 85 cents, to $12.60-1/4 a bushel at 1138 GMT, its highest since March 2008.
Corn Cv1 rose 2.7% to $7.75-1/4 a bushel, soybeans Sv1 rose 2.05% to $16.94 a bushel. Corn and soybeans are around their highest since September 2012.
“Until the fighting in Ukraine ends, it cannot be expected that wheat and corn exports from Ukraine and Russia will resume,” one European trader said.
Russia and Ukraine provide 80 per cent of the world’s exports of sunflower oil, which competes with soy oil.
Ukrainian ports remain closed and dealers are reluctant to trade Russian wheat after Western sanctions, so buyers are seeking alternative suppliers.
Export demand for European Union wheat surged last week and is expected to continue to rise.
“With such a sudden run on other sources, there is worry that some countries will introduce export restrictions to stop their own domestic supplies being sucked away,” another trader said, but added some big importers were still willing to buy for fear prices will rise further.
Bulgaria’s government said it will expand wheat reserves, while producers fear an export ban.
Already, Hungary has banned all grain exports with immediate effect because of the price increases.
Big importer Algeria on Sunday issued a tender to buy wheat. Wheat purchase tenders were also issued on Monday by Taiwan and Tunisia.