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A Mecardo analysis dated July 25, 2023 reviews Russian and Ukrainian wheat export shares, which together accounted for 27% of global exports last year. It notes that Russian attacks on ports and ships drove a three-day rally in CME SRW, which then eased as the market became less concerned.
Russia and Ukraine supply a large share of world wheat trade, so even small shipping disruptions move prices. The waning concern suggests the risk premium may be fading unless attacks resume.
mecardo.com.auAngus BrownJul 25, 2023After 361 past bullish geopolitics events, WHEAT moved a median +0.7% over 5 sessions (58% higher; middle half -1.4% to +3.7%), and +1.3% over 20.
After 94 past bullish geopolitics events, KWHEAT moved a median +0.1% over 5 sessions (50% higher; middle half -2.7% to +5.8%), and +0.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Notes the three-day rally on port attacks faded as the market became less worried about Black Sea disruption, consistent with the premium unwinding.
