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Frontrunner - 21st January 2022

World wheat markets rallied sharply this week, reacting to mainstream media reports of increasing tension between  Russia and the Ukraine. This was highlighted by Chicago Board of Trade (CBOT) wheat futures which gained over 7% and, in doing so, recaptured all the losses they had made so far in 2022.

The short covering and speculative buying are understandable given the potential disruption to international trade should conflict develop. Russia is the world’s primary wheat exporter with as much as ten million tonnes from its estimated 35-million-tonne surplus left to ship this season. Ukraine, the fourth-largest wheat exporter, has eight million tonnes from its 24.5-million-tonne surplus to ship. Together, the two countries account for almost 30% of the world’s wheat export trade. Ukraine is also expected to ship up to 33.5 million tonnes of corn this season.

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