ARK TRADE AG Summary of First Half of 2022 Agricultural Commodities Trading: A 28% Drop in Prices, After Peaking During War in Ukraine

ARK TRADE AG's Artificial intelligence (AI), powering the ARK TRADE digital trading platform, finds that wheat and soybean prices have higher susceptibility, 30% higher than corn, to 'global crisis' parameter throughout this period.

ROTKREUZ, Switzerland, July 19, 2022 /PRNewswire/ -- The first six months of 2022 were especially tumultuous for markets dealing in agricultural commodities amidst the war in Ukraine and the current global food crisis; suffering from high volatility and exceptionally cautious business cycles of both funds and futures. All this alongside supply chain disruptions, and sharp rises in fuel and shipping costs.

Findings of ARK TRADE's analysis of the year's first two quarters point to a sharp drop, of up to 28%, in wheat, soybean, and corn prices immediately following the peak prices largely driven by the war in Ukraine.

ARK TRADE, founded by serial entrepreneur Orit Shifman, has developed a unique digital platform powered by AI for global trading of commodities and finished goods. The platform gathers a phenomenal mass of data from around the globe, to include information not readily used by analysts, all bearing varying levels of impact on product prices and availability. Therein, financial data, news reports, weather forecast, global warming, local and international politics, COVID reports, social media posts, are all fused, processed and analyzed. ARK TRADE's recent analysis pointed to the high vulnerability of wheat and soybean prices according to its 'global crisis' parameter, 30% higher than the vulnerability of corn prices to the same parameter throughout this period.

Wheat is the commodity most commonly associated with the current crisis in Ukraine, as both sides of the war are among the world's largest exporters of wheat. The year began with a bushel (1 US bushel = 35 liters of dry goods) of wheat priced at $7.6 (USD). On the eve of the war, as tensions increased between Ukraine and Russia, this price went up to $8.5 a bushel, finally peaking at $12.78 in mid-May. By the close of the first half of 2022 (June 30^th), wheat had dropped 27%, to $9.3 per bushel. ARK TRADE's AI estimates that this coincides with general global acceptance of the situation in the region.

Corn (maize) is the world's most prevalent agricultural commodity, and the most ubiquitous crop produced in the US. ARK TRADE points out that between 2014 and 2020, corn futures were traded at a relatively stable price margin of $3.15-$4.3 a bushel. 2021 marked the beginning of a spike, reaching $6 per bushel at the start of 2022, going up to $6.6 at the dawn of war. As the war continued, prices soared even further, amid speculation that corn crops will replace the mass shortages in wheat and sunflower oil, normally supplied by the region.

On May 16^th, corn peaked at $8.09 per bushel, then plummeted to $6.5 on June 30^th; a 20% drop from the peak price and a full percent less than its price pre-war.

ARK TRADE's AI also indicates that corn prices are also heavily impacted by supply chain disruptions.

Soybean crops are made up of several varieties and are among the world's oldest agricultural commodities. Originating in Southeast Asia, the majority of traded soybean crops are now grown and processed in the US. Soybeans are also widely traded on commodities markets and suffer the losses accrued in margins between the price of soybean futures and final price of product upon delivery. Soybeans, sold for $12.3 at the start of 2022, were climbing steadily to $15.73 per bushel by the eve of the war in Ukraine. The price of soybeans eventually peaked at $17.69 on June 9^th. Among the several soybean futures currently sold, most notable is marked for November, selling at $14.7 per bushel. The next future after that is set for August and selling at $15.7 per bushel.

With the prices of these commodities lower in futures (again, as a reaction to the situation in Ukraine) compared to the present market price – otherwise known as high backwardation –prices have dropped by 6.5% since the outbreak of the war, at almost a dollar less per bushel.

ARK TRADE's AI Assessment: Current global food shortage and political crises will continue to affect prices of wheat and soybean in the immediate future; Global warming will have little to no affect throughout this time period.   

ARK TRADE's AI provides yet further insights. Among the parameters it rates as having the greatest effect on prices, the AI ranks 'Global Crises' highest, contributing to 36% or 31% of soybean and wheat prices, respectively. This is a result of the instability and uncertainty of the situation between Ukraine and Russia, two of the world's largest wheat producers.      

The war has also caused the prices of fertilizer to skyrocket, as both Russia and the Republic of Belarus are major players in the world's fertilizer industry. On the other hand, the current crises only seem to have a far lesser impact of 18.5% on future prices of corn as speculations of corn prices weaken. The platform's AI estimates that in the short term, corn prices will be affected mostly by current price levels and subsequent availability.

Conversely, global warming, another important crisis frequently featured in the media, seems to have far less influence on these commodities in the short term. ARK TRADE's AI indicates that weather should only have a negligible impact of 1% on wheat, and a 2.5% on soybean and corn prices.

Agricultural Market shifts – first half of 2022

It is hereby clarified that the aforementioned information, including, inter alia, the data, analysis, conclusions and details, do not constitute professional recommendations or advice of any kind, nor is this information provided to be used or relied upon as advice or consultation concerning investments, taxes, finances, and/or legal matters. All the above-mentioned does not pertain to include all relevant details and data related to the matters at issue and is subject to change.

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SOURCE ARK TRADE AG