Grain Spreads: Wheat/Corn

Sean LuskGeneral Commentary


Corn and wheat’s fortunes remain tied together in my opinion led by the Ukraine-Russia story. Russia’s conquest of Ukraine didn’t occur as was anticipated on Friday. Ukraine is holding out and has bogged down the Russian advance. The western powers have increased financial sanctions, employing SWIFT to halt Russian bank transactions. Therefore corn futures followed wheat higher on concerns Russia’s war with Ukraine may disrupt the global grain trade, including exports out of the Black Sea region. Combined, Russia and Ukraine account for nearly one-fifth of world corn exports. USDA reported 1.544 million metric tons (60.8 million bushels) during the week ended Feb. 24, down from 1.578 MMT the previous week. Expectations ranged from 1 MMT to 1.7 MMT. . Marketing year corn export shipments to all destinations fall short of the seasonal pace needed to hit USDA’s target by 100 million bushels, but the deficit is rapidly shrinking as China picks up the pace of taking shipment on the massive purchases it made a year ago. Ukraine export terminals remain closed. The longer the invasion/war goes on, the higher the damage sustained to Ukraine’s economic and agricultural ability to export. The winter wheat crop is in dormancy in Eastern Europe, but will need harvesting in the summer and the corn crop will need planting come spring. The Ukraine livestock industry consumes 7 million metric tons of corn, 3 million metric tons of barley, and 2.5 million metric tons of wheat for feed/year. If the grains are completely wiped out, then the livestock industry must go as well and then the world would see equivalent imports. While this is unlikely in my view, I’m not sure many thought we would get to this point with the aforementioned considerations. In my view funds may continue to buy the dips until there is clarity on this situation. No trade recommendations on this post other than extreme caution is warranted. 

Trade Ideas






Please join me every Thursday for a grain and livestock webinar at 3pm Central. We discuss supply, demand, weather, and the charts.

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.​

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.​

All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.

Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

Walsh Trading

53 W Jackson Suite 750

Chicago, Il 60604