By Mark O’Brien, Senior Broker

In a recent blog post, it was noted, “We’re just one month into this calendar year with more developments ahead – geopolitically, weather-related and monetary policy related – all set to cause commodity prices across a range of asset classes to exhibit potentially rugged price action. Keep an eye out.” Now two months into this calendar year, it appears that statement was subdued.

Many of the market moves stem from the escalating war activities in Ukraine, which will remain a dominant force in determining prices of several commodities. Russia and Ukraine account for nearly 20% of global corn exports and 25% of wheat. May corn traded to new contract highs overnight (747¾, basis May). May wheat traded up its 75-cent limit today to the highest level since March of 2008. Russia is responsible for up to 40% of the palladium supply to the world, a commodity not typically among any trader’s top-ten to keep an eye on. It’s seen a ±$300/oz. move up since Friday’s close and is poised to close at daily contract highs. Prices in crude oil surged again today, trading intermittently to life-of-contract highs above $112/barrel. These and other markets – think metals, other energy products, stock index futures – will continue to exhibit outsize moves. And while fears of physical supply disruptions, a ratcheting up of inflation expectations and other forces have sellers moving to the sidelines across numerous commodities, these traders are not gone. Take care.

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