Russia's invasion of Ukraine has affected the cost of several commodities, among them oil, wheat and precious metals. While most were moving toward high marks, tougher U.S. sanctions announced Thursday tempered the markets some. Economists still warn that commodity costs could add to record inflationary pressures.
Oil
West Texas Intermediate crude topped $100, but ended the day at $92.81, still quite high. The prices settled after learning that strengthened sanctions would not include energy supplies. President Joe Biden also floated that strategic reserves would be opened some in coordination with other nations. Europe receives oil from Russia, a source cut off with the conflict
Wheat
With Russia and Ukraine being major exporters of wheat, futures for the grain surged by the maximum allowed by the exchange. putting a vital source of global supplies at risk while heightening concerns of a further acceleration in global food inflation. Benchmark soft red winter wheat in Chicago rose 5.7% at the exchange's limit to $9.3475 a bushel, a nine-year high.
Soybeans
Soybean prices have been on a run. Bad weather in Brazil and funds looking at soybeans as a diversifying option have pushed prices higher for several weeks. With the Russian escalation, soybeans hit $17.19, the highest level since September 2012, before settling at $16.51 for the day. Soybean producers also will likely benefit from the stop to sunflower oil exports from Ukraine.
Corn
Corn prices gained 45% in 2021, and have remained high in the new year. With the South American weather concerns, plus Ukraine, prices on Thursday touched the highest price since May before closing up 1.3% at $6.9025. Russia and Ukraine produce about 20% of the world's exports of corn.
Gold
Precious metals were trading high early in the day Thursday, with gold at its highest level since September 2020. But after new U.S. sanctions against Russia were announced, precious metals slipped, with investors expecting heavier penalties. Gold dropped below the key $1,900 per ounce level.
S&P 500
The S&P 500 rose 1.5% to 4,288.70 after dropping more than 2.6% earlier in the session. The S&P had closed in correction territory on Tuesday, but gained ground after President Joe Biden announced heavier sanctions. Domestic inflation concerns have weighed on the U.S. markets.
Graphics by Eddie Thomas, Star Tribune. Research by Patrick Kennedy. Source: Bloomberg News and Thomson Reuters.
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