Wheat Prices Have Soared on Global Conflict, Extreme Weather

  • Wheat prices have emerged over the past month, climbing to their highest level since August.
  • Global geopolitical conflict and extreme weather have impacted supply.
  • Higher wheat prices could stoke inflation, which is already running hotter than expected in the US.

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Wheat prices have soared to their highest level in eight months thanks to a series of disruptions stemming from geopolitical conflict and extreme weather events.

Chicago SRW wheat futures continued to surge throughout April, rising 15% in just the last month to trade at the highest level since August, according to Bloomberg data.

Stockpiles of wheat have been drawn lower largely due to weather events and geopolitical disruptions. That includes excess rain in Europe and dry soil in Ukraine, Russia, Australia, and the US, all major wheat exporters.

Bloomberg notes that strong harvests of grain among countries on the Black Sea have helped keep prices lower, but future markets are pricing in expectations for supply pressures to soon send prices up again.

In addition to weather events, Russia’s war with Ukraine has also driven prices higher. Russia has attacked key grain hubs in Ukraine, which caused wheat prices to skyrocket in 2023. Ukraine’s workforce has also been depleted by its need for soldiers to fight back against Russia’s invasion.

Higher wheat prices could stoke inflation, which has clocked in hotter-than-expected in the US for the last three months. Consumer prices grew 3.5% year-over-year in March, with food prices surging 2.2%.

 
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