Evening Edition | Wednesday, June 1, 2022
In this Evening Edition, catch up on the latest news about commodity prices, ethanol blending mandates, and the global food crisis.
Commodity Prices Boom
Electrified by Russia’s invasion of Ukraine, commodity prices are sky high, with soybean futures topping $16.80 a bushel and the USDA forecasting the highest-ever farm-gate price for wheat, writes Chuck Abbott.
But, according to five university economists, high prices for corn, wheat and soybeans are far more likely to revert to their long-term averages than mark the dawn of a new era of permanently higher prices.
The current run of high prices was fueled by comparatively tight global supplies, adverse weather that has created uncertainty about crop production, strong global demand, and the disruptions in food supplies stemming from warfare in the Black Sea region.
The Biden administration is likely to raise ethanol blending mandates for 2021 above its proposed figure in December to align with U.S. consumption, according to two sources briefed on the decision.
A final decision on biofuel blending mandates for 2020, 2021, and 2022 is expected by Friday.
Administration officials huddled at the White House on Tuesday to review options, the sources said. The meeting underscores the political implications of the upcoming decision, which will impact fuel and food prices amid a 40-year high in inflation rates.
Global Food Crisis
The war in Ukraine has fueled a global food crisis with surging prices for grains, cooking oils, fuel, and fertilizer.
According to U.N. Secretary-General Antonio Guterres, any agreement to unblock shipments from Ukraine of commodities such as grain was still some way off.
President Vladimir Putin said earlier this week that Russia was willing to facilitate Ukrainian wheat exports through the Black Sea, as well as shipments of Russian fertilizer, if sanctions were eased.