Wheat prices spiking as invasion of Ukraine continues
Prices will bounce up and down as new information becomes available but will likely remain high as long as the war is ongoing
By Rob Roach, ATB Economics 14 March 2022 1 min read
The Russian invasion of Ukraine has led to price spikes across a number of key commodities including wheat.
Drought conditions in key wheat-producing countries had already helped push wheat prices higher before the invasion began with the average daily closing price of wheat futures on the Chicago Mercantile Exchange up by about 20% in January 2022 compared to January 2021.
Both Russia and Ukraine are major wheat exporters and the conflict has seen prices go from US$7.73 a bushel at the start of February to as high as $12.94 on March 7—an increase of 67%.
Prices will bounce up and down as new information becomes available but will likely remain high as long as the war is ongoing.
Higher prices for wheat and other crops will exacerbate food price inflation.
And while higher prices are helpful to farmers, higher input costs for things like energy and fertilizer (both of which are also spiking due to the war) and the elevated level of uncertainty regarding what will happen next are major challenges.
Answer to the previous trivia question: It took as many as 3,400 workers per day to construct the Empire State Building in one year and 45 days.
Today’s trivia question: According to the United States Department of Agriculture, how many tons of wheat are forecast to be consumed globally in the 2021/22 marketing year?