Drought in major wheat-producing countries could push up grain prices

As of September 22, Ukraine exported almost 1.7 million tons of wheat. Currently, there is sufficient contract coverage on the market, which to some extent restrains price growth. The situation may change as early as October. This is reported by the analytical department of the agricultural cooperative PUSK, established within the VAR.

“The indicative price for third-class wheat is maintained at $212–214 CPT-port. This is due to sufficient product reserves at traders and a large supply on the world market, especially from the Russian Federation,” analysts note. However, the coverage of wheat contracts for November-December is significantly decreasing for many market players.

“Contracts for October are already being concluded at a price of $218–220 CPT-port, with a potential increase to $223. The main reason is the reduction in stocks and growing uncertainty about the future harvest,” PUSK reports. Climate risks in countries that are major wheat producers will be the leading factor supporting prices.

“In Ukraine, the central and southern regions are suffering from drought, and no significant precipitation is forecast in the near future. Russia is also experiencing a critical moisture deficit, and the sowing rate is the slowest in the last five years. A similar situation is observed in France, Romania and Bulgaria, where the lack of moisture threatens the volume of winter wheat sowings. In view of this, there is a threat of a decrease in the area under winter crops. Importers, anticipating potential problems with the 2026 harvest, may purchase grain more actively. Therefore, wheat prices may increase significantly in January-March,” analysts believe.

Tags: grain, prices, wheat, drought