Hard red winter wheat gained the most in seven weeks as severe weather worldwide intensifies concern about shrinking food supplies.
Heat has hurt wheat crops in India, spurring the country to mull export restrictions, Bloomberg reported Wednesday. The move threatens to further tighten the amount of grain available on the world market, especially since Indian shipments have been booming in the wake of Russia’s invasion of Ukraine.
In the U.S., wheat grown in Kansas and nearby U.S. states is at risk because of harsh drought. Harvests of the grain used for bread flour are set to begin in June, meaning adequate rains will be crucial over the next few weeks if yields have any chance of improving.
“It’s going to be a short crop no matter what at this point,” Joe Nussmeier, a broker at Frontier Futures in Minneapolis, said in a phone interview on Thursday. Damage from dryness in places like Texas and Oklahoma is “already too far gone,” though Kansas and Colorado can still benefit from showers, he said.
In Europe, some wheat areas are also shy of rain, further stoking concerns as a global hunger crisis worsens.
“If less wheat now reaches the global market from India, we risk seeing supply tighten again,” Commerzbank AG analyst Carsten Fritsch said in a note. “The uncertainty about this is likely to continue preoccupying the wheat market and could lead to further price rises.”
In Chicago, hard red winter wheat has been trading at a premium over global benchmark futures, which are tied to a softer class of wheat used to make cookies and cakes. The spread indicates an expectation that supplies of the former will decline in the upcoming 2022-23 marketing year.
The most-active hard red winter wheat contract jumped 4.8% to settle at $11.77 a bushel, the biggest gain since mid-March. Benchmark futures gained 2.8% to $11.065 a bushel.
For North American spring wheat, which is prized for its high protein content, soggy fields are delaying plantings in the U.S. northern Plains and Canada. July futures added 2.8% to $12.0975 a bushel in Minneapolis.