The Russia-Ukraine conflict is affecting more than just gas prices. It’s also leading to multiyear wheat future highs, sparking more concerns about global food supplies.
On Wednesday (March 2nd), the cost per bushel hit $10.59, which is a 7.62% jump from Tuesday. The price marks the highest since March 26, 2008, which peaked at $10.9125.
“Look at what’s happening to wheat prices right now,” Helima Croft, RBC Capital Markets head of global commodity strategy, told CNBC’s Worldwide Exchange. “We could be talking about a major food inflation story.”
Wednesday was the second day in a row that wheat reached the highest amount that a commodity is allowed to jump in a single day, or “limit up.”
The skyrocketing price comes from reports that Russian soldiers have surrounded two major cities in southern Ukraine. And that jolted the market because both Russia and Ukraine are two of the world’s biggest wheat exporters.
According to JPMorgan, Russia actually sends out the most wheat to countries around the globe, and Ukraine consistently sits in the top four exporters.
Around 207 million tons of the commodity goes out every year. Of that, 12% comes from Ukraine and 17% comes from Russia.
The Russia-Ukraine Conflict May Also Affect Beer Prices
Wheat isn’t the only commodity that’s suffering from the Russia-Ukraine Conflict.
As the supply decreases, the brewers will need to up their prices. And if it gets bad enough, there could be a major shortage.
However, breweries aren’t struggling just yet. In fact, the major suppliers don’t expect to feel an impact any time soon. But the smaller companies have reported that they’re expecting to raise prices 50 cents to one dollar per pint once barley becomes more scarce.
Aside from wheat and barley, corn futures are also up amid the war. On Wednesday, the price per bushel hit $7.4775, and that’s the highest price the market has seen for the commodity since December 7th, 2021.
“The potential loss of Ukraine exports of corn makes the world situation tighter and could be enough to keep corn prices trending higher for now,” Jack Scoville, grains analyst with Chicago trading firm Price Futures Group, said via the Wall Street Journal.
Corn is a necessary ingredient for foods such as bread and tortillas and drinks like Coca-Cola and bourbon. It’s also used to produce ethanol, which is blended into gasoline. So the price hikes could affect more than just your pantry.