February 21

2/21 - Russia’s invasion and annexation of the Crimean Peninsula in 2014 eliminated Ukraine’s small navy and set up Russia (if it chooses to do so) for unimpeded naval blockades. In 2022, 95% of Ukraine’s grain exports were transported via Black Sea ports. Ukraine accounts for 12% of the world’s wheat exports (mostly to Egypt, Indonesia) - and 16% of global corn exports (China, EU). Russia, the world’s top wheat exporter, has seen shipments drop 30% since July 2021 due to restrictions aimed at curbing domestic inflation. The Russian decline, combined with an impending Ukrainian disruption, would leave global wheat availability extremely tight. Chicago (CME) wheat futures are at $7.97 per bushel (2/18). That’s below 11-year highs of $8.56 in Nov 2021, but up $.55 in the past 3 weeks. CME wheat averaged $5.49 per bushel in 2020 before jumping to $7.02 in 2021.