Wheat and nickel prices hit records as assault on Ukraine cities intensifies2 min read

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Wheat and nickel futures jumped to record highs as Russia intensified its shelling of Ukrainian cities two weeks after president Vladimir Putins troops moved into the country.

Wheat futures rose as much as 5.4 per cent to $13.63 a bushel in early trading on Tuesday before pulling back to be down 2 per cent, according to Bloomberg data.

The benchmark nickel contract jumped more than 13 per cent to a record high of $57,000 a tonne, according to Reuters, having risen more than 70 per cent to $50,300 during the previous trading session.

The conflict in eastern Europe has thrown global markets into tumult, driving up commodity and energy prices to record highs, threatening to push inflation higher and boost the cost of production for vital materials.

Ukraine and Russia account for almost a third of global wheat exports, prompting worries over food shortages and sending prices surging since the war began almost two weeks ago.

Oil edged higher after German chancellor Olaf Scholz indicated Berlin was reluctant to ban Russian imports he considered of “essential importance” to the European economy.

The comments followed remarks by US secretary of state Antony Blinken that Washington was in discussions with European allies to ban Russian crude imports, pushing Brent crude, the international benchmark, up 18 per cent to $139 a barrel on Monday.

Brent rose 1.6 per cent to $125.18 a barrel in Asia trading on Tuesday after finishing the previous session up more than 4 per cent. West Texas Intermediate, the US marker, was up 1.3 per cent at $120.93.

European natural gas prices also settled about 5 per cent higher at €215.50 a megawatt hour, after jumping as much as 40 per cent on Monday.

The threat of a ban on Russian oil rattled Wall Street, sending the S&P 500 down almost 3 per cent and the tech-focused Nasdaq Composite 3.6 per cent lower. The Euro Stoxx 50 fell more than 1 per cent as Moscow warned of “catastrophic consequences” for blocking its oil.

Futures tipped European stocks to fall further in the wake of the US sell-off, with the Euro Stoxx 50 expected to fall 1.4 per cent. The S&P 500 was set to shed 0.2 per cent when Wall Street opens for trading.

Asia equity markets were mostly lower on Tuesday, with China’s benchmark CSI 300 index down 1.7 per cent and Japan’s Topix falling 1.5 per cent.

Caroline Bain, chief commodities economist at consultancy Capital Economics, said that a US ban of some form appeared increasingly likely but “the devil is in the detail”.

Blocking Russian energy exports would push Brent to about $160 a barrel and “energy prices would stay higher for longer as it would take time for supply to pick up the fill the shortfall”, she added.

Venezuelan president Nicolás Maduro confirmed that his government held talks with senior US officials, the first high-level meeting between the countries since 2019 when they severed diplomatic ties. The talks were held as US president Joe Biden’s administration has sought alternative energy supplies if sanctions imposed on Russia are tightened.

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