Miller Magazine Issue: 149 May 2022

74 COVER STORY MILLER / MAY 2022 It seems that there has been more uncertainty and volatility than we would have in a decade, only slightly more than four months into the year. As Lenin famously said: "There are decades where nothing happens; and there are weeks where decades happen" Chart 1 below shows annualised volatility of wheat as a monthly average. The last couple of months have seen higher volatility at higher levels than the com- modities boom of the mid-2000s. The primary driver of this has been the invasion of Ukraine by Russia. This is a terrible situation for the people of Ukraine, but it is also having a huge impact upon people across the developing world as food prices rise further, to being close to unreachable lev- els. Food protests are occurring in many of the world's nations, including Sri Lanka, Peru and Iran. Even if Ukraine were able to commence exports, it would take a long time to alleviate the issues faced. While supplies from the world's most important ex- porters are constrained, the USA is facing a down- grade in their wheat potential. The lingering effects of the La Nina, are causing large parts of the United States to fall into drought. The overall US winter wheat crop is showing good to excellent conditions of 27%, the lowest since 1989. There were times over the past five years when I was starting to think that grain markets were a bit boring. We didn't have the same excitement that we saw during the period 2005 to 2015; well, we couldn't have asked for more excitement in the market than 2022 has brought us. It was the best of times; it was the most volatile of times Andrew Whitelaw Manager Thomas Elder Markets Melbourne