Wheat Soars to 14-Year High as Russia Invasion Chokes Trade

Wheat Futures Price Soars To 14-Year High As Russia Invasion Chokes Trade

Wheat futures rose by the maximum allowed by the Chicago Board of Trade for a rare third day as Russia’s invasion of Ukraine stifles shipments from some of the biggest suppliers. Prices for the staple grain rocketed past $10 a bushel for the first time in more than a decade. Corn also leaped to a nine-year high, and soybean oil edged down from a record. The high prices are giving fresh impetus to accelerating global food inflation, and the drop in supplies has the potential to dislocate markets for years to come.

The shortfalls are likely to spill over into the next season, potentially for even longer. Ukrainian farmers — many engaged in the defense of their country — appear unlikely to plant spring crops as usual, and Russia is facing sweeping penalties on its financial system. Plus, infrastructure is being damaged in the midst of the war.

“The market is pricing in lost trade coming from the Black Sea region,” Arlan Suderman, chief commodities economist at StoneX, said in a note. “But it hasn’t yet started to factor in a year of lost production from Ukraine.”

Benchmark soft red winter wheat futures jumped by the daily limit for a third straight session, something that hasn’t occurred since 2008. Prices soared as much as 7.6% to $10.59 a bushel. The futures have surged more than 30% this year, increasing the cost of everything from bread to cakes and noodles. Minneapolis spring wheat neared the $11-a-bushel mark. Milling wheat climbed as much as 9.1% to touch a record in Paris before paring the gains.

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Source: Bloomberg

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