- U.S. Hard Red Winter Wheat exports have fallen to their lowest levels ever.
- The global wheat market is also suffering from Russia’s invasion of Ukraine.
- The El Niño phenomenon is causing a drought in Australia that is affecting crops.
Global wheat market facing crisis
The global wheat market is in a serious crisis. According to the latest USDA report, U.S. Hard Red Winter Wheat exports have reached their lowest level ever. Exports are expected to drop by 10 million bushels in September to just 155 million bushels. This troubling decline is due to the long-term trend of shrinking Hard Red Winter Wheat stocks, along with expanding corn and soybean acreage and increasing international competition that is making U.S. exports less competitive globally.
What factors are exacerbating the wheat market crisis?
The global wheat market is also in a cycle of tight supply due to ongoing concerns about Russia’s invasion of Ukraine in early 2022. These countries account for nearly 30% of global wheat exports.
Adding to the uncertainty in the global wheat market is the fact that Australia recently announced the arrival of the El Niño weather phenomenon, which brought an intense heat wave to the southeast of the country. This raises fears of bushfires and could affect wheat production in the country, which is one of the world’s largest wheat exporters.
The confluence of these factors – from declining U.S. exports to ongoing geopolitical tensions and climate challenges – poses an extremely difficult challenge for the global wheat market.
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