Concerns about food prices continue.

All eyes are on wheat, after all one of the most important staple foods in the world.

In the second week of March, the price reached record levels on the Chicago Stock Exchange.

The reason was concerns about wheat exports from Russia and Ukraine - in the first case because of the sanctions, in the second because of the immediate consequences of the war.

According to the Ukrainian Minister of Agriculture Roman Leschtschenko, the area for spring sowing could be more than halved this year and only around seven million hectares instead of the originally expected 15 million hectares.

Meanwhile, Russia is struggling to ship its wheat at the same frequency as before it invaded the neighboring country.

Martin Hock

Editor in Business.

  • Follow I follow

The price increase has not continued recently.

Whether American, UK or European prices have all come down from their highs, American wheat was the strongest, but also saw the strongest rise.

Nonetheless, prices are still twice as high as last summer.

Hightower analysts say the market will remain volatile amid high uncertainty surrounding shipments from Ukraine and worries about unfavorable weather conditions in China, Europe and the US.

The concerns are mainly of a short-term nature.

The ratio between prices for immediate delivery and deliveries in 12 months is at the third highest level since 1998 after hitting a record high in March.

The trading volume on the futures exchanges is not exceptionally high in the current uncertain situation.

The situation is simply too uncertain to take any concrete positions, even if market opinion has rarely been so unanimous.

For the week ended March 15, the spread between long and short positions by wealth managers on the Chicago Stock Exchange rose 13.5 percent to its highest level in about seven months — but not an extraordinary high.

In fact, the dealers were also rather cautious.

The reason for the increase in the difference is a much larger decline in short positions, which fell 7 percent, while long positions fell 2 percent.

High inflows into commodity ETF

According to statements by market participants, however, the position could have increased again in the week of March.

However, the data will not be available until Friday.

Overall, there is no unusual movement in the positions on the futures markets.

Even the sharp decline in money managers' short positions is rather typical.

Meanwhile, exchange-traded commodity ETFs are seeing high inflows.

In the first week of March, $4.5 billion was newly invested.

That's typically an entire month's worth of inflows and, for the first time, was greater than that of stocks or bond ETFs.

Agricultural goods were particularly in demand with an inflow of around 468 million dollars.

The provider Teucrium even suspended the creation of new shares for its wheat ETF.

ETFs on agricultural stocks have also recently been in greater demand than ever before, and in the three weeks after the start of the war they recorded the highest inflows in eight years.