By Naveen Thukral and Tom Polansek
SINGAPORE/CHICAGO- Harsh weather is reducing wheat production in major global exporters, cutting inventories that have already been projected to hit nine-year lows, while fueling a sudden surge in prices.
Dryness afflicting suppliers from Russia, the world’s biggest, to Argentina is making food production vulnerable as recent Russian attacks on grain ships in the Black Sea rekindles concerns about the war limiting supplies.
While top southern hemisphere exporters Argentina and Australia have lost several million tons of wheat to drought and frost, a lack of moisture is hitting plantings for 2025 crops in Russia, Ukraine and the United States.
“The wheat market is getting tighter and it is going to get worse,” said Ole Houe, head of advisory services at IKON Commodities in Sydney.
World wheat inventories have fallen from record highs five years ago, US data shows, as poor weather hurt output and Russia’s 2022 invasion of Ukraine temporarily spiked grain prices.
Last week Ukraine said Russian attacks damaged two grain ships there.
Russian crops suffered from late frosts and then drought since April, Agriculture Minister Oksana Lut said this week.
“In some regions, there hasn’t been any rain since April,” Lut told a conference. “I don’t know if there have been years like this before, when everything that could happen with the climate actually happened.”
In the physical market, Black Sea wheat in Southeast Asia is quoted around $280 a metric ton, including cost and freight, up from $265 about a month ago.
Chicago wheat futures jumped last week to their highest in four months, as the market recovered from its weakest since 2020 in July.
Some farmers in exporting nations, such as Australia and Canada, are holding back sales in anticipation that prices will climb even higher.
“It is the trend most places where wheat comes from, farmers are not selling and it is becoming a problem for traders who have committed sales to millers,” said one Singapore-based grains trader at an international company.
US farmer Doug Keesling, 50, said he was praying for rain for his fields in Chase, Kansas, after planting about 1,200 acres (486 hectares) of wheat during a third year of drought. – Reuters
