The Chicago wheat closed in the highest price in its history because the escalation of Russian war in Ukraine is cutting off the supply of one of the main suppliers of this cereal in the world.
Benchmark futures rose at the maximum level of the market, 85 cents, or 7%, to close at $12.94 a bushel. That comes on top of a huge 41% rise last week, the biggest increase in data spanning six decades, and puts prices at their highest level since 2008. The Paris contract for wheat surpassed an all-time high after advancing. up to 11%.
Despite the rejection of the field, the Government implemented a trust for wheat
Wheat is an important staple food and higher prices will raise the pressure on government budgets and world hunger will increase. Prices have reached levels not seen in nearly 14 years amid the global food price crisis, surpassing the highs that helped contribute to the Arab Spring a decade ago. Meanwhile, US farmers are worried about drought and China is facing historically unfavorable growing conditions.
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Wheat production affected by the war in Ukraine.
Russia and Ukraine
Together, Ukraine and Russia account for more than a quarter of the world wheat trade, used in products ranging from bread and noodles to cattle feed. The conflict has caused the closure of Ukraine’s main ports and has severed logistical and transport links. Trade with Russia has also been stifled by the complexity of negotiating sanctions and insurance and freight costs.
Operators will be on the lookout for US and Brazilian crop reports to be released this week, awaiting any comment on the impact of Russia’s attack on Ukraine on crops.
LM / ED