Oil and corn prices continue to fall

Prices for oil and agricultural products are falling on news of talks between Ukraine and Russia, as well as China's statement that it does not support Russian aggression.

The Financial Times has published 15 points of demand for negotiations, including a ceasefire, the withdrawal of Russian troops from Ukraine in exchange for neutral status and the reduction of the Armed Forces. The news led to lower world prices for oil and agricultural products, although Ukrainian officials said it was a proposal from Russia, while Ukraine's position remained unchanged - full liberation of the occupied territories since 2014 and compensation for losses.

The Russian army suffered heavy losses, so it went from open combat to massive missile and bomb strikes on Ukrainian cities. By destroying homes, Russia is stepping up pressure on Zelensky and putting him in front of a choice - either the death of civilians or a truce on terms unfavorable to Ukraine.

A positive signal to the world was China's statement that it is against the war and supports Ukraine. The Chinese ambassador to the United States denied rumors that China was aware of Russia's intentions to invade Ukraine and asked to postpone it until the end of the Winter Olympics. "Let me say responsibly that the claim that China knew about the war, agreed with it or tacitly supported it is misinformation. If we knew about the imminent crisis, we would do everything possible to prevent it. "

The ambassador reminded that China is the largest trading partner of both Russia and Ukraine, as well as the world's largest importer of crude oil and natural gas, so it also suffers losses from the war.

May Brent oil futures on London's ICE Futures fell 2% to $ 98 a barrel yesterday, and April WTI oil futures on the New York Mercantile Exchange (NYMEX) fell 1.5% to $ 95 / barrel. barrel, losing 14% and 14.7% of the price on Monday. However, today they are trading at $ 100 and $ 96.5 / barrel, respectively.

Prices are under pressure from the increase in crude oil reserves in the United States and Libya's statement to OPEC + to increase production. According to the EIA, crude oil inventories in the United States rose unexpectedly by 4.35 million barrels, although experts expected a reduction of 1.8 million barrels. The number of active oil rigs for the week of March 5-11 increased by 8 units to a two-year high of 527 units.

Ethanol production for the week decreased to 1.026 million barrels / day, and stocks increased by 674 thousand barrels to 25.945 million barrels, which is close to the record "coveted" in April 2020 - 27 million barrels.

May corn futures in Chicago yesterday fell 4% to $ 287.4 / t, and Black Sea corn - only 1.55% to $ 365 / t.

Grain exports from Ukraine are almost paralyzed, so sellers are currently looking for opportunities to ship corn across the western borders. Demand prices are still $ 270-290 / t DAP - border, but the introduction of export licensing and the law on simplified taxation during wartime do not yet allow traders to make purchases, so they try to ship as much as possible available batches of grain from elevators.