Russian Military Revolt Heightens Uncertain Commodity Outlook

Russian Military Revolt Heightens Uncertain Commodity Outlook

'Desperation often leads to unpredictability,’ Teucrium ETFs strategist said.

Reviewed by: Lisa Barr
Edited by: Ron Day

The attempted military revolt by Wagner, a Russian mercenary group, over the weekend dissipated as quickly as it began. The well-organized group, which has been responsible for some of the worst atrocities in Ukraine and outside the region, quickly took control of Russia’s southern military command in Rostov and then marched—virtually unobstructed—on to Moscow before abruptly turning around, reportedly after striking a deal with the Kremlin. 

The dramatic events left everyone—from Russian pundits, the country’s allies like China and international investors—scratching their heads about what they just witnessed. Is this the first act in a once-in-a-generation regime change, or a signal of much worse repressions, political instability and economic repercussions to come? 

So far, Russia’s economy has managed to carry on the war in Ukraine relatively unscathed, propped up by energy prices. The Black Sea Grain Initiative also kept wheat export revenues flowing. If any of these were to change, we’d have reasons to worry about broader ramifications for the global economy.  

New Level of Uncertainty

While investors have been pricing in risk related to Russia for some time now, what took place last week signaled a new level of uncertainty and erratic decision-making that could rattle global commodity markets. 

So far this year, the Energy Select Sector (XLE) is down 9.2%, the Vanguard Energy ETF (VDE) is down 8.97% and the Teucrium Wheat Fund (WEAT) has retreated 8.15%. 

As Jake Hanley, senior portfolio strategist at Teucrium ETFs, told me on Monday, “desperation often leads to unpredictability.” On Monday, things still looked desperate and uncertain for the Kremlin as the Wagner chief announced the mercenary group will be folded into the regular military that they rebelled against just a few days ago. 

Will this strengthen the Russian military? Embolden Ukrainians to finish the war? How will Putin react? Will it get worse before it gets any better? Any escalation could impact the flow of commodities out of the region and raise questions about long-term stability. 

“As the war prolongs and desperation grows on either side, the implications for global commodity trade become increasingly severe,” Hanley pointed out.  


Contact Daria Solovieva [email protected] 

Daria Solovieva is a former managing editor at Before joining, she worked as a financial journalist for leading publications all over the world, including Fortune, The Wall Street Journal, Bloomberg and others.