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Dry Russian Weather Boosts Wheat Prices in Food Inflation Threat

Bloomberg

Bumper harvests have capped futures in recent years, but bad conditions are now pushing them higher.

A wheat field near Stavropol, Russia. Photographer: Andrey Rudakov/Bloomberg

Welcome to our guide to the commodities underpinning the global economy. Today, reporter Celia Bergin looks at how dry weather in Russia is pushing up global wheat prices. To get this newsletter in your inbox, sign up here.

Wheat’s getting expensive again, and it’s largely down to one producer.

Russia, the grain’s biggest exporter, has been the market’s main threat as well as its saving grace over the past couple of years.

President Vladimir Putin’s invasion of Ukraine sent prices spiraling to a record high in 2022 on worries that the two nations wouldn’t be able to get their crops to the world. But Russia’s subsequent back-to-back bumper harvests have cooled the market since then.

That’s changing as dry weather and unseasonably late frosts in its main growing regions drive a global rally. Analysts have cut back their harvest estimates for 2024 by more than 10%, spurring the largest monthly price jump since Russian tanks rolled over the border.

Growers in Ukraine and other parts of Europe are also facing difficulties. Signs of a good crop in the US have tempered prices since late May, but worldwide stockpiles are still set to hit the lowest in nine years.

Combine harvesters in a wheat field near Stavropol, Russia. Photographer: Andrey Rudakov/Bloomberg

In addition to the bleak harvest prospects, the waters are being muddied by a lack of transparency on the precise conditions of Russia’s crop.

In addition to the bleak harvest prospects, the waters are being muddied by a lack of transparency on the precise conditions of Russia’s crop.

Dry Russian Weather Boosts Wheat Prices in Food Inflation Threat

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https://www.bloomberg.com/news/newsletters/2024-06-06/dry-russian-weather-pushes-up-wheat-in-food-inflation-threat

07.06.24

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