Corn prices decline as traders assess the Ukraine crisis

On Monday, US corn futures stepped lower on the cited progress of the diplomatic efforts to end the war in Ukraine.

Contracts tied to the grain fell 1.54% or 11.70 points to $749.38 per metric ton. Still, it trades 14.44% higher in the past month.

Accordingly, market sentiment boosted after Ukrainian and Russian negotiators gave their most upbeat assessments after weekend negotiations.

At the same time, officials said that the countries will set a talk again in the near term.

In addition, the downturn of oil prices pulled down the positive movement of corn. The international benchmark Brent crude slipped 3.80% or 4.28 points to $108.34 per barrel.

Similarly, US West Texas Intermediate (WTI) crude weakened 4.88% or 5.33 points to $103.92  per barrel.

However, markets remained on the edge as tensions remained high. On Sunday, Moscow attacked Ukraine’s base near the Polish border.

A barrage of missiles hit Kyiv’s Yavoriv International Center for Peacekeeping and Security. Reports revealed that the strike killed 35 people and wounded 134.

Eventually, the United States and its allies slapped economic sanctions against Russia, denouncing the state’s aggressiveness.

Ukraine is the fourth-leading exporter of corn, accounting for 15.00% of worldwide exports. Then, Russia ranked sixth with a 2.30% share. Together, they provide 4.00% of global maize.

However, the Rome-based Food and Agriculture Organization said it is uncertain if Kyiv could harvest crops amid the war.

FAO also projected that 20.00% to 30% of fields used to grow winter cereals, corn, and sunflower in Ukraine will remain unharvested until 2023.

Furthermore, Brazil, an agricultural giant of soy and corn, stands to gain a windfall from the possible surge of commodities prices.

Analysts forecast an increase of 67.00% in exports of Brazilian corn in 2022.

Corn, Wheat, Soybean Skids

Aside from corn, wheat futures edged down 3.21% or 35.50 points to $1,070.50 per metric ton.

Subsequently, Russia’s aggression on Ukraine has disrupted wheat shipments from both countries.

Meanwhile, traders hope that the US, the second-biggest exporter of grain behind Moscow, will stop the emerging crisis.

Consequently, Soybean contracts lost 0.37% or 6.38 points to $1,669.75 per metric ton. The commodity pared back from its early gain of 0.45%.

On Sunday, Argentina, a top producer of soy, halted the registration of export sales of soy oil and meal. This decision drew swift condemnation from the industry.