Ruble and wheat volatility

thumbnails/PutinWheatNEW_Cropped.jpg thumbnail image
Yusuf M.
March 1, 2024
Written by Yusuf M.
Est read: 1 minute

Wheat prices: According to the Chicago SRW Wheat Futures (global wheat benchmark) wheat prices rose over 50% in the period when the conflict began (Feb 2022) to May 2022. This was primarily due to a complete halt of grain shipments from Ukraine (7th largest wheat producer). This was consequently resolved in the Black Sea Grain Initiative resulting in a 20% decrease of global crop prices

  • In July 2023, Russia quit the initiative and continues to use air attacks against ships heading to Ukraine.

  •  The current price reflected by the benchmark is even lower than pre invasion suggesting traders are not fearful about worsening global Food Security

Ruble - Russia faced a currency crisis and a flurry of sanctions in the wake of the invasion. RUB/USD fell around 24% between February and March 2021 however these effects seem to have consequently stabilized and by September 2022 the Ruble had reached above pre-war levels. However, between November 2022 and August 2023 RUB/USD plummeted again and fell by around 31.25%. One of the main factors driving this depreciation is the mounting sanctions the Russian economy faced, resulting in reduced trade particularly in regard to energy exports and a lack of access to foreign reserve meaning the Russian central bank had less influence on FX markets.