Expansive global supply outlook helps push wheat prices lower

Wheat prices have dropped to a four-year low due to increasing supply and improved weather conditions in key production areas, following a significant price spike due to the conflict in Ukraine. This decrease in prices is expected to continue into the 2024/25 marketing year, with global wheat supplies predicted to rise. Despite adverse weather conditions in some regions, Russia enjoyed a strong wheat crop last year, and Ukraine has been able to export grain through alternative routes. Major buyers, including Egypt, have taken advantage of the low prices to make significant purchases.

With wheat prices reaching a four-year low of $5.20 per bushel in late July, consumers around the world may well have recently been breathing a collective sigh of relief. They can increasingly enjoy many of their favourite foods, such as bread, pasta and noodles, at some of the lowest costs since 2020, with the supply outlook widely reported to show increasing abundance for this year and next across many of the world’s key export markets. With the first half of the 2020s heading towards completion, it is reasonable to conclude that few commodities have experienced more of a rollercoaster ride during the first four and a half years of this decade than wheat. The outbreak of war in Ukraine in late February 2022 saw wheat futures spike to all-time highs of more than $13 per bushel by early March; they proceeded to remain at elevated levels throughout the second quarter as it proved increasingly challenging for producers to ship grain exports out of the Black Sea. Russia is the ...