With Russia’s advance into eastern Ukraine, markets have responded almost on cue, says Jim Wiesemeyer, Farm Journal Washington policy analyst.
“Wheat is a concern, and farmers might want to be selling some,” he told AgriTalk host Chip Flory on Tuesday. “Corn and energy may have some staying power.”
Dynamic might be the best word to describe what’s underway in the marketplace, adds Tommy Grisafi, risk management advisor, Advanced Trading. He notes the U.S. traded up and down in crude yesterday, and then up again. In addition, the bond market exploded.
“When I say bonds exploded, it means yields went down,” Grisafi says. “The news of the Ukraine had a big effect. The CME Group did have a bond market… open stock indices, cruide oil energies, gold, silver, all had a reaction.”
Along with that, Grisafi says the marketplace continued to exhibit concerns about inflation.
“If you’re just realizing there’s a problem in Russia, the Ukraine, you’re going to be disappointed when you see how these markets react the next few weeks, my friend,” he told Clinton Griffiths, Editorial Director for AgDay TV.
Multiple Concerns on Multiple Fronts
The U.S. will see the impact of the Russia-Ukraine conflict in the marketplace in the coming weeks, especially with regard to energy costs, Wiesemeyer adds.
“If this goes on with any duration, it could lead to a worldwide depression. I hate to be negative, but this situation is big,” he says. “If you think we have high energy prices here, look at what Europe has.”
The White House said today it is reviewing how to respond if Russia curtails exporting global oil products due to hostilities over Ukraine, potentially triggering a spike in gasoline prices.
Along with energy prices, Wiesemeyer is concerned Russia will undertake “cyber warfare” measures that could impact U.S. broadly and agriculture specifically.
“That’s a big concern; it’s unprecedented,” he says.
Already, government officials in the Ukraine announced on Wednesday the country was working to “fend off” waves of cyberattacks to its government and banking websites.
Earlier today, President Biden announced the United States will impose sanctions on the company in charge of building the Nord Stream 2 gas pipeline, the latest of sanctions that have been imposed by the United States and its European allies on Russia.
More insights from Wisemeyer’s conversation on AgriTalk are available here:
