Wheat Price Slump Heralds Further Drop in Global Food Inflation

Global wheat prices are sinking on a flood of Russian supplies, signaling a further cooling in world food inflation.

(Bloomberg) — Global wheat prices are sinking on a flood of Russian supplies, signaling a further cooling in world food inflation.

Wheat futures in Chicago are heading for their fifth straight monthly loss, the longest stretch of declines in two decades. If they fall a little more from this level, they’ll reach the lowest price in about 17 months, well before the Russian invasion of Ukraine, which sent prices spiraling to a record last March.

A wave of Russian exports from a bumper crop is one of the top reasons for the retreat. Egypt has bought Russian wheat exclusively at four straight tenders. The competition for market share has pressured US and European prices, and the European Union has trimmed its export outlook.

The focus is turning to the outlook for global wheat crops this year. US farmers are likely to plant more than analysts expect, and nearly all of France’s soft-wheat crop is in good to very good shape. Traders are also watching talks on the Ukraine grain-export deal, which is up for renewal in March.

Corn futures are trading around the lowest since early January. Soybeans, by contrast, are supported by the drought in Argentina, and a good crop in the US this summer will be crucial to stop prices rising much further.

The latest snapshot of global food inflation is scheduled for this Friday when the United Nations publishes its food price index for February. The gauge may extend its decline from the lowest since September 2021.

–With assistance from Megan Durisin.

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