Oct 1, 2014
Home| Tools| Blogs| Discussions| Sign UpLogin

Some Ukraine Grain Defaults Seen by Solaris as Spot Prices Surge

March 3, 2014
markets money
  
 
 

Some Ukrainian suppliers are defaulting on supply contracts to take advantage of rising prices in the spot market, according to Solaris SA, which trades crops from the region.

"Certain suppliers who have contracted to sell in hryvnias are now defaulting on those contracts and reselling the goods spot at higher prices," Swithun Still, director of Solaris in Lausanne, Switzerland, said without giving amounts. "Ukrainian farmers are holding on to grain, rather than selling it for local currency."

Benchmark corn prices traded in Chicago jumped to the highest since September and wheat advanced to a two-month high after Russian forces took control of the southern Ukrainian peninsula of Crimea, stoking concern that conflict may disrupt supply. Ukraine is set to be the third-biggest corn shipper and the sixth-largest wheat exporter this year.

Ukrainian feed wheat for March delivery was offered at $246 a metric ton to $248 a ton free-on-board as of Feb. 28, from $240 to $245 a ton a week earlier, according to UkrAgroConsult, a research company. In FOB transactions the seller delivers goods on board a ship and the buyer is responsible for transportation and insurance. Prices in hryvnias for grain delivered to port jumped 10 percent in a week, according to UkrAgrConsult. The country’s currency slid 10 percent last week.

"Prices are rising sharply and most FOB offers have been withdrawn today," Still said. Some buyers are seeking to hedge the risk with Ukraine by switching to other origins, and there is more demand for Russian wheat and corn, he said.

Corn jumped as much as 4.2 percent to $4.8275 a bushel on the Chicago Board of Trade today and wheat increased as much as 5.9 percent to $6.38 a bushel, the highest level since Dec. 12.

 

See Comments

RELATED TOPICS: Corn, Wheat, Marketing, Global Markets

 
Log In or Sign Up to comment

COMMENTS

No comments have been posted



Name:

Comments:

Receive the latest news, information and commentary customized for you. Sign up to receive Top Producer's eNewsletter today!

 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions