Article Image

IPFS News Link • Economy - International

Wheat Jumps To Nine-Month High On Fears Of Dwindling Global Stockpiles

• https://www.zerohedge.com, by Tyler Durden

The Biden administration has deflected rampant food inflation on 'greedy' corporations, but more likely due to supply constraints. Beef and egg prices are climbing, and staples like orange juice, cocoa beans, and coffee are skyrocketing. Now, the latest soft commodity that is pushing higher is wheat. 

Bad weather across the world's top growing regions, including the driest May in Ukrainian records, lack of rainfall in Western Australia, and unseasonably cold weather in Russia, has sent wheat futures in Chicago to a nine-month high.

Here are the top growing regions experiencing adverse weather conditions (courtesy of Bloomberg):

Black Sea Dryness: Top exporter Russia risks missing out on crucial moisture, with weeks of heat and not enough rain in the country's south prompting analysts to cut harvest estimates. Half Russia's winter wheat will remain too dry over the next two weeks, Commodity Weather Group said Wednesday. Russia should still reap a big crop, but its dominance means that any jolts to local prices feed through to other markets — and the country's wheat has been getting more expensive lately.

War in Ukraine: Dryness has also hampered swaths of Ukraine's wheat in recent weeks, but war is fueling other problems. Attacks on agriculture infrastructure threaten exports and the workforce has been depleted as men serve in the army. Grain output in the upcoming season could drop 6% from a year earlier with farmers expected to divert grain acres to more profitable crops like rapeseed.

Wet Western Europe: A soggy spring hurt crop development across northwest Europe. Winter-crop quality — which determines whether supplies are used for food or for animal feed — could also suffer. In France, the share of wheat and barley in top conditions lags far behind last year's level. Rain has also slowed spring plantings in the UK, Germany and France. "We are obviously concerned by the issue of unplanted areas given it is linked to the weather conditions," Benoit Pietrement, chair of the grains council at crops office FranceAgriMer, said last month.


midfest.info