Wheat prices continue to climb as the Russian invasion of Ukraine is ongoing. A Rabobank analyst says the world’s biggest wheat buyers may need to reconsider whether they’ll continue buying grain from the Black Sea regions.
“Russia and Ukraine have moved a lot of wheat into the market already, so things should be pretty good for this year,” says Stephen Nicholson of Rabobank. “However, the bigger problem is we don’t have enough world stocks to make up for the loss of Russia and Ukraine because they are such big producers.”
Buyers will have to reconsider business in the Black Sea region because of doubts about getting vessels out of the region safely. The Hagstrom Report says buyers may turn to other suppliers like the U.S., Argentina, and Europe. With the ongoing acreage battle between corn and soybeans in the U.S., Nicholson says we’ll see what the war does to the number of U.S. wheat acres.
In the wheat futures on Thursday, May contracts of KC and Chicago wheat both closed up their 75-cent daily limits Thursday, ending at $11.50 1/4 and $11.34, respectively. May spring wheat also posted a limit up movement, gaining 60 cents to finish at $11.18.
Another big question for wheat in 2022 will be to see if Ukraine’s winter wheat crop can still find a way to be harvested, but things are not looking so good at the moment. With the looming supply cuts out of Ukraine and potentially Russia, it is understandable the market is trying to pull bushels forward instead of paying farmers to store them.