March 4, 2022

The Russian invasion of Ukraine entered its eighth day today. According to Ukrainian officials, Russian forces took control of the southern port of Kherson on Wednesday, a key harbor on the Black Sea. Ukraine’s entire Black Sea coast is in danger of being captured by Russia, potentially sequestering Ukraine from worldwide trade.

Both Russia and Ukraine are major exporters of grains including wheat and corn. Disruptions to shipments out of the Black Sea region can fan the flames on food inflation and aggravate concerns about the cost of living for consumers across the world. 

In an update provided by Ukraine’s Ministry of Defense earlier this morning, it was reported that Russian forces were still attempting to reach the northern outskirts of Kyiv, Ukraine’s capital city. The Ministry of Defense added that Russian attacks were continuing in other cities including Chernihiv, Kharkiv, and Okhtyrka. Talks between delegations from Ukraine and Russia were scheduled to resume at 3 p.m. Moscow time on Thursday. 

The International Criminal Court (ICC) has launched an investigation into possible war crimes and crimes against humanity committed in Ukraine. For the first time in four decades, the United Nations Security Council convened an Emergency Special Session of the General Assembly in response to Russia’s war on Ukraine. 

In a statement made yesterday, President Biden said “Russia is responsible for the devastating abuses of human rights and the international humanitarian crisis that we are watching unfold in Ukraine in real time". The U.N. recently reported that one million refugees have fled Ukraine since the start of the war. The U.N. High Commissioner for Refugees Filippo Grandi stressed that "unless there is an immediate end to the conflict, millions more are likely to be forced to flee Ukraine". 

On Wednesday, US stocks rallied following Tuesday’s steep declines. Financial stocks led yesterday’s advances as Federal Reserve chair Jerome Powell conveyed the likelihood that interest rate hikes will be small, and possibly by only a quarter-point. Oil prices climbed again amid the Russia-Ukraine conflict while all eleven of the S&P's sectors closed in higher territory. 

Live cattle and lean hog futures closed mixed yesterday while feeder cattle finished with sharp gains following recent sessions of extreme declines. May corn futures closed ¾ cents lower at $7.25 per bushel and May soybeans were down 27 cents to $16.63 per bushel. Wheat futures skyrocketed to multi-year highs yesterday on growing concerns about the global wheat supply. May wheat futures traded with limit 75 cent gains for the second consecutive day, reaching $10.59 per bushel. 

Meanwhile, some Russian companies that were previously valued at more than $100 billion have been reduced to penny stocks as Western sanctions target Russia's financial sector. Russia's central bank said that the country's stock market will be mostly closed for the fourth consecutive day due to the financial unrest precipitated by the Russia-Ukraine war. Shares in Sberbank, Russia’s largest bank, have tumbled by more than 99% since mid-February. In Wednesday London trading, Sherbank’s shares bottomed out at 1 cent, a precipitous one-day free fall of 85%. 

Photo Credit: Casablanca Stock / Shutterstock.com

Courtney Shum
Urner Barry
1-732-240-5330
cshum@urnerbarry.com