2021 Wheat Crisis: Drought, War, and Weather Unleash Supply Chain Chaos and Price Surge

The current state of wheat supplies is facing significant challenges due to adverse weather conditions and the ongoing war in Ukraine. Russia, the world’s dominant wheat exporter, may miss out on crucial moisture as weeks of heat and lack of rain have affected the southern region of the country, causing analysts to reduce harvest estimates. Similarly, wet weather in western Europe and dry conditions in Australia and Ukraine are negatively impacting crop yields. These factors, coupled with reduced stockpiles, have resulted in higher wheat prices, potentially leading to increased costs for bread and pasta, and could increase inflationary pressures on central banks. Money managers have become less bearish about wheat futures, indicating potential further price increases. However, experts warn that the situation remains uncertain, and continued weather monitoring is necessary to assess the full extent of the damage.