Wheat Prices Spike as US Sees War, Adverse Weather Hurting Crops
Comment of the Day

May 12 2022

Commentary by Eoin Treacy

Wheat Prices Spike as US Sees War, Adverse Weather Hurting Crops

This article from Bloomberg may be of interest to subscribers. Here is a section:

From war to extreme weather, the world’s wheat crops are under threat, a view that’s being bolstered by a US report.

Production in Ukraine, one of the biggest growers, will fall by one-third compared to last year, according to a U.S. Department of Agriculture forecast. Other major producers are battling drought, floods and heatwaves. In all, global stockpiles in the coming season will dwindle to a six-year low. 

The smaller wheat harvests and a slow start to the US planting season is risking more food inflation ahead. Hunger is already on the rise in many parts of the globe.

Eoin Treacy's view

Food stockpiles are low after two years of pandemic lockdowns. The war in Ukraine is an additional complication and prices are already high. The wildcard in terms of supply is Russia where farmers have access to fertilizer and oil from domestic sources. No one is going to broadcast they are buying Russia grain but that supply will reach market as prices rise.

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