(Bloomberg) — Wheat prices surged to a two-month high as strained U.S.-Russia relations over Ukraine triggers concern about future grain shipments from Eastern Europe.
A Kremlin spokesman earlier warned that America’s move to put as many as 8,500 troops on alert “exacerbates tensions.” The U.S. and its allies say Russia could be preparing for military action against Ukraine, though Moscow has denied it intends to invade. Russia and Ukraine collectively account for nearly a third of world wheat and barley shipments.
“The chance of no wheat exports from both countries if war breaks out” is sending prices higher, Jack Scoville, vice president of Price Futures Group Inc. in Chicago, said by email.
READ MORE: Tension Over Ukraine Poses a Risk for the Price of Bread
Declining conditions for growing U.S. crops is also pushing up wheat futures.
“It remains dry in the western Great Plains with no real relief in sight,” Scoville said.
The U.S. Department of Agriculture on Monday reported lower winter wheat crop conditions in key growing states such as Kansas compared with a few weeks ago.
Most-active benchmark wheat jumped 3.5% to $8.2875 a bushel as of 11:31 a.m. in Chicago. That’s the highest price since late November. Hard red winter wheat futures hit a four-week high. Soybeans and corn also rose.
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