Chicago wheat settled at the highest price on record as Russia’s intensifying war in Ukraine cuts off supplies from one of the world’s leading breadbaskets.
Benchmark futures climbed by the exchange limit 85 cents, or 7%, to close at $12.94 a bushel. That builds on a massive surge of 41% last week, the biggest gain in data spanning six decades, and puts prices at their highest since 2008. The Paris contract for wheat breached an all-time high after jumping as much as 11%.
Wheat is a major food staple and surging prices will pile pressure on government budgets and add to global hunger. Prices have reached levels that were last seen about 14 years ago amid the global food-price crisis, surpassing highs that helped contribute to the Arab Spring a decade ago. Meanwhile, U.S. farmers are worried about drought and China is facing historically bad crop conditions.
“Talk that the wheat crop is China is not good is new, and supportive for prices,” Naomi Blohm, senior market adviser at Total Farm Marketing in West Bend, Wisconsin, said in a note.
Ukraine and Russia together account for more than a quarter of global trade of wheat, used in bread and noodles to livestock feed. The conflict has closed major ports in Ukraine, and severed logistics and transport links. Trade with Russia has also been stifled by the complexity of navigating sanctions and soaring insurance and freight costs.
