Severe weather conditions are significantly reducing wheat output in major exporting countries, leading to a decline in inventories projected to reach nine-year lows and causing a sharp increase in prices. Key points include:
Dry conditions in leading suppliers such as Russia and Argentina have adversely affected food production, with Russian attacks on grain ships in the Black Sea heightening supply concerns.
Analysts report that southern-hemisphere exporters like Argentina and Australia have lost millions of metric tons of wheat due to drought and frost.
Russia has also revised its 2024 wheat crop estimate downward due to ongoing dry conditions affecting plantings.
The global wheat market is tightening, with inventories down approximately 14% from record highs five years ago.
Recent missile attacks on Ukraine’s Odesa region have further exacerbated the situation, impacting crop prospects.
In Southeast Asia, Black Sea wheat prices have risen to around $280 per ton, while Chicago wheat futures have surged to their highest levels in four months.
Many farmers in exporting nations are withholding sales, anticipating even higher prices, complicating trading dynamics.