Corn and soybean prices surge near record highs

Yahoo Finance's Ines Ferre breaks down the price actions around agricultural commodities stemming from increasing energy prices and escalations in the Russia-Ukraine war.

Video transcript

RACHELLE AKUFFO: Welcome back, everyone. Some key agricultural commodities under pressure from the Russia-Ukraine invasion, pushing up prices, but also extreme weather patterns affecting other major exporters. For more on this, let's bring in Yahoo Finance's own Ines Ferre. Ines, what do we need to know?

INES FERRE: Well, Rachelle, just to keep it in perspective, right now, we are seeing the price of corn at twice the level as to where they were before the pandemic. Also, soybeans twice as expensive. Keep in mind that soybeans are fed to livestock. It's made for soybean oil. And soybeans, a lot of them come from Latin America. So there's been poor harvests in South America. Remember that Argentina and Brazil are a big soybean exporter. Not such great weather to plant here in the US.

And then you've got rising energy costs that is pushing up the price of agricultural commodities. So if you take a look at corn futures, year to date, they're up 37%. You've got soybean futures year to date that are up 25%. And corn has been near all-time highs. Fertilizer costs are up, so farmers are opting for-- to plant more soybeans or for wheat because corn takes up so much fertilizer. You also have the Biden administration saying that you can have more ethanol this summer in gasoline prices. So that is sending up demand for corn as well.

And I spoke to Dennis Sweeney. He is an agricultural commodity trader. He's telling me that the war in Ukraine is making it very hard logistically to ship out wheat, corn. He's also saying that funding is really sticking to those inflationary traits and also that cotton prices, he says, have soared lately, that availability is scarce. I asked him, how long can we expect these prices to stay elevated? He said grain prices are going to stay firm for a while.

Remember that with these higher prices, you're also looking at higher food prices, which are already, the World Bank says, at all-time highs. And Ukraine issues, well, he says that those aren't expected to end anytime soon. Who knows? But nevertheless, those are also contributing to these higher commodity prices.

BRAD SMITH: All right, a clear picture of how the international conflict is continuing to impact these commodity prices. Yahoo Finance's own Ines Ferre, thanks so much for breaking that down for us, Ines.