Wheat prices at three-year high. Market under pressure again

High prices today are primarily a matter of grain availability

Wheat prices on the U.S. market have risen to their highest levels in three years, while in Europe prices have reached nearly $300 per metric ton. This shows that the market is reacting more and more strongly to the limited availability of grain in international trade.

This is not due to a physical shortage of wheat. In the Black Sea region, harvests are good, and there is plenty of grain on the local market. The problem begins when it comes time to export it. Weaker trade from Russia and Ukraine means that part of the supply is not reaching foreign buyers at the same pace as before.

For the global market, therefore, it is not only the size of the harvest that matters, but also how much grain is actually available for international sale. If exports remain limited, good harvests do not necessarily mean lower prices in other markets.

Good harvests and weak exports are driving down local prices

In Russia and Ukraine, the situation today differs from that on the international market. High supply after the harvest, combined with limited exports, is causing local prices to fall, despite high global prices.

The mechanism is simple. The more grain remains on the domestic market, the greater the competition among sellers. Producers have fewer sales opportunities, and the supply surplus begins to weigh on prices. As a result, price increases on international markets do not directly translate into better conditions for farmers in Russia and Ukraine.

It is precisely this discrepancy that best illustrates the current situation. On the international market, the problem is limited grain availability, while locally in Russia and Ukraine, there is a surplus. As long as exports from the Black Sea region remain weak, this discrepancy may continue to exert pressure on both sides of the market.