Wheat jumps 19% in August as war pushes it to a three-year high

Wheat prices in Chicago continued their climb to a three-year high, driven by growing concerns over the escalating war between Russia and Ukraine and the potential for further disruptions to grain supplies from the Black Sea region, one of the world’s most important production and export areas.

Chicago wheat prices rose by as much as 2.6% during Thursday’s trading session, following a 6.4% jump in the previous session. This brought gains since the beginning of August to approximately 19%, marking the highest level since July 2023. Wheat reached $7.6050 per bushel (a bushel equals approximately 27.2 kilograms of wheat), up 1.6% at 10:42 a.m. Singapore time, while corn and soybean prices fell by 0.2%.

This sharp rise marks a significant shift in the trajectory of global grain markets, after a period of ample supplies had kept prices at low levels. However, escalating military developments in the Black Sea region have once again brought supply security and shipping movements to the forefront of market concerns.

The war has inflicted severe damage on ports, grain terminals, and export-related infrastructure, leading to a substantial decline in shipments from the region amid fears that disruptions could worsen if military escalation continues.

Ukraine is already facing a drop of more than half in its agricultural exports this season compared to previous estimates, according to the Ukrainian Ministry of Agriculture. Meanwhile, Russian wheat shipments are expected to fall by more than 50% in August compared to the same month last year.

The crisis’s repercussions extend beyond futures markets. Russia and Ukraine are major grain suppliers to the Middle East, Africa, and Asia, with many consumers in these markets relying on lower-cost supplies from the Black Sea region, particularly at this time of year.

In other grain markets, corn prices dipped slightly during Thursday’s trading after rising 2.5% in Wednesday’s session, while market movements remained closely tied to military developments in the Black Sea and the future of grain exports from Russia and Ukraine.