Markets can only be summed up as being in a state of severe turmoil, possibly even chaotic, this week.

Following the invasion of Ukraine on 24 February, markets went into a tizzy on both sides of the Atlantic.

Paris MATIF is the most relevant market to us and the nearby March wheat contract rose nearly €50/t on Thursday morning (24 February) to hit a high of €344.75/t before easing back considerably.

Up to that point, physical prices here in Ireland had been trading around €40/t above the March futures position.

During those same few hours on 24 February, MATIF December wheat contract prices rose to €319.75/t before they eased back to close at €291.75/t.

All market positions eased back considerably again the following day when December MATIF closed at €268.75/t last Friday (25 February).

This same contract closed at €286.50/t on Monday and at €301.25/t on Tuesday last. The March contract closed on Monday at €322.50 and at €351.25/t on Tuesday.

Huge volatility

This massive volatility has made it impossible to get a solid handle on native prices this week. Futures prices are fluctuating by €30-€50/t within a few hours, and this level of volatility makes any attempt at an average price meaningless.

Chicago prices also moved to all-time highs this week, with March wheat passing $10 per bushel and December wheat up to $9.41 per bushel (€328/t and €308/t respectively).

Oilseeds

Oilseed prices also increased last week, as did crude oil and edible oils. On Tuesday 1 March, November MATIF rape increased by €34/t to hit €694.50/t, with the May contract up at €825.75/t.

Sentiment shift

It is hardly surprising that the invasion of Ukraine has led to a sentiment shift. On average over the last three years, Ukraine exported 54.7 million tonnes of grains, over half of which was maize, with the balance made up of wheat, barley and a lot of oilseeds.

Exports from Russia averaged 43.6mt in recent years, 81% of which was wheat.

The potential loss of some or all of this product from global trade, due to war and sanctions, would put a huge hole in global availability.

So, it is hardly surprising that grain markets have become bullish, given that the two countries in conflict account for almost 10% of global production and 25% of the grain traded globally.

Old-crop maize prices also rose last week, but new-crop maize saw less of an increase.

An added question now is, what will happen to Ukrainian planting and production in 2022?