A 28% drop in prices, after peaking during the war in Ukraine


Artificial intelligence (AI) from ARK TRADE AG, which powers the digital trading platform ARK TRADE, finds that wheat and soybean prices are more sensitive, 30% higher than corn, to the “global crisis” parameter. throughout this period.

ROTKREUZ, Swiss, July 19, 2022 /PRNewswire/ — The first six months of 2022 have been particularly tumultuous for agricultural commodity markets amid the war in Ukraine and the current global food crisis; suffering from high volatility and exceptionally cautious economic cycles for both funds and futures. All of this comes with supply chain disruptions and steep increases in fuel and transportation costs.

The results of ARK TRADE’s analysis of the first two quarters of the year indicate a sharp drop, up to 28%, in the prices of wheat, soybeans and corn immediately after the price peak largely caused by the war in Ukraine.

ARK TRADE, founded by a serial entrepreneur Orit Shifman, has developed a unique AI-powered digital platform for global trading of raw materials and finished goods. The platform brings together a phenomenal amount of data from around the world, to include information that is not readily used by analysts, all with varying levels of impact on product pricing and availability. In there, financial data, news reports, weather forecasts, global warming, local and international politics, COVID reports, social media posts are all merged, processed and analyzed. ARK TRADE’s recent analysis highlighted the high vulnerability of wheat and soybean prices according to its “global crisis” parameter, 30% higher than the vulnerability of corn prices to the same parameter throughout this period.

Wheat is the product most often associated with the current crisis in Ukraine, as both sides of the war are among the largest exporters of wheat in the world. The year began with a bushel (1 US bushel = 35 liters of dry goods) of wheat at the price of $7.6 (USD). On the eve of the war, as tensions grew between Ukraine and Russiathis price has increased to $8.5 a bushel, eventually peaking at $12.78 in mid-May. At the end of the first half of 2022 (June 30the), wheat had fallen by 27%, to $9.3 per bushel. ARK TRADE AI believes this coincides with general global acceptance of the situation in the region.

But but) is the most widespread agricultural product in the world and the most ubiquitous crop produced in the United States. ARK TRADE points out that between 2014 and 2020, corn futures traded at a relatively stable price margin of $3.15$4.3 a bushel. 2021 marked the beginning of a peak, reaching $6 the bushel in early 2022, rising to $6.6 at the dawn of war. As the war continued, prices rose even higher, amid speculation that corn crops would replace massive shortages of wheat and sunflower oil, normally supplied by the region.

On May 16ecorn peaked at $8.09 the bushel, then fell to $6.5 on June 30the; a 20% drop from the maximum price and a full percentage less than its pre-war price.

ARK TRADE’s AI also indicates that corn prices are also heavily impacted by supply chain disruptions.

Soy crops are made up of several varieties and are among the oldest agricultural commodities in the world. Native South East Asia, the majority of commercialized soybean crops are now grown and processed in the United States. Soybeans are also widely traded in commodity markets and suffer accumulated losses in the spreads between the soybean futures price and the final price of the product upon delivery. Soybeans, sold for $12.3 beginning of 2022, were rising steadily to reach $15.73 the bushel on the eve of the war in Ukraine. The price of soybeans eventually peaked at $17.69 on June 9e. Of the several soybean futures currently being sold, the most notable is marked for November, selling at $14.7 per bushel. The next future after that is set for August and sells at $15.7 per bushel.

With the prices of these commodities being lower in the futures contracts (again, in reaction to the situation in Ukraine) relative to the current market price – otherwise known as the high price demotion – prices have fallen 6.5% since the start of the war, to almost a dollar less per bushel.

ARK TRADE AI Rating: The current global food shortage and political crises will continue to affect wheat and soybean prices for the immediate future; Global warming will have little or no effect throughout this period.

ARK TRADE’s AI provides even more insight. Among the parameters it considers to have the most effect on prices, the AI ​​ranks “global crises” highest, contributing 36% or 31% to soybean and wheat prices, respectively. This is the result of the instability and uncertainty of the situation between Ukraine and Russiatwo of the largest wheat producers in the world.

The war also caused fertilizer prices to skyrocket, as the two Russia and the the Republic of Belarus are major players in the global fertilizer industry. On the other hand, the current crises only seem to have a much lesser impact of 18.5% on future corn prices as corn price speculation weakens. The platform’s AI estimates that in the short term, corn prices will be primarily affected by current price levels and subsequent availability.

Conversely, global warming, another major crisis frequently covered in the media, seems to have much less influence on these commodities in the short term. ARK TRADE AI indicates that weather should only have a negligible impact of 1% on wheat, and 2.5% on soybean and corn prices.

Changes in the agricultural market – first half of 2022

Product

Price

January 3, 2022

Price

at the start of the war

Peak price

Price

June 30, 2022

Wheat

$7.6 (USD)

$8.5 (USD)

$12.78 (USD)
May 17e

$9.3 (USD)

But but)

$6.0 (USD)

$6.6 (USD)

$8.09 (USD)

May 16e

$6.5 (USD)

Soy

$12.3 (USD)

$15.73 (USD)

$17.69 (USD)

June 9e

$14.7 (USD)

It is hereby clarified that the above information, including but not limited to data, analysis, conclusions and details, does not constitute professional recommendations or advice of any kind, and such information is not provided for be used or relied upon as advice or consultation regarding investment, tax, finance and/or legal matters. All of the above does not address all relevant details and data relating to the matters at issue and is subject to change.

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SOURCE ARK TRADE AG

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