Oil and corn prices fall on news of Russia's appeal to China for support
Yesterday, the main drivers of prices on world markets were the new Covid-19 outbreak and the introduction of quarantine in one of China's provinces, as well as Russia's request for help in the form of weapons and food (suhpai) for the war against Ukraine.
News of China's consideration of Russia's aid, which will lead to Western sanctions against Chinese companies, has led to a collapse in the value of shares of Chinese companies, which depreciated by $ 2.1 trillion a day.
Yesterday, May futures for Brent crude oil at London's ICE Futures fell 5.6% to $ 106.5 / barrel, and April futures for WTI crude oil on the New York Mercantile Exchange (NYMEX) - by 6.3% to $ 103 / barrel, but today they fell to $ 102.3 and $ 98.3 / barrel, respectively.
The possible decline in Chinese oil demand through Covid-19 and quarantine in Shenzhen and Jilin provinces, as well as the possibility of secondary sanctions if Russia supports Russia's aggression against Ukraine, continue to lower oil prices, increasing pressure on grain and oilseeds markets.
May corn futures on the Chicago Board of Trade on Friday reached a record $ 300 / t this season, and fell 1.9% yesterday to $ 294.5 / t. May soybean futures fell 0.5% to $ 613.6 / t on Friday and $ 608.3 / t today, up from $ 620 / t on March 8.
Exports of corn and soybeans from the United States are slower than last year. Despite problems with corn supplies from Ukraine and a poor soybean harvest in Brazil, China has not yet seen an increase in demand. According to the USDA, in the week of March 4-10, corn exports decreased by 38% to 1.145 million tons, and soybean exports - from 776 to 772 thousand tons. In total, 25.92 million tons of corn and 42.15 million tons of soybeans were exported during the season. which is 16% and 21% respectively lower than last year's rate.
China is unlikely to officially provide Russia with the help it needs, fearing a fall in its economy after Russia. This will accelerate the defeat of the Russian army in Ukraine, so according to military analysts, in 10-14 days we can expect the withdrawal of Russian troops.
