A combination of delayed plantings in Northern U.S. Plains and Canada due to soggy weather, a dry spell in Western Europe, chaos in Ukraine, and severe weather in India, have disrupted global wheat markets, sending prices in Minneapolis to the highest levels since 2008.
Spring wheat is used to make bagels, pizza crust, rolls, and croissants, among other specialty items, which touched a 14-year high on Monday morning at $12.31 a bushel due to delayed planting fears across the northern U.S. Plains and Canada because of abnormally wet conditions.
Across the Atlantic, a three-week drought plagues western Europe and adds more uncertainty for wheat. Weather forecaster Meteo France expects France to be hit with "summer-like heat this week," according to Bloomberg.
Paris-based adviser Agritel suggests even though wheat crops have been in great shape. The latest dry spell could revise the crop ratings lower given the current weather outlook and weeks of drought.
"The growing water deficit in France is causing concern amidst an already tense market," Agritel said in a commodity note.
Aside from Europe, India has considered halting wheat exports as a severe heatwave damaged crops.
"The situation is clearly stretched in terms of availability on the international scene, despite the very promising harvest expected in Russia," Agritel added.
Then there's Russia and Ukraine. Both are responsible for a quarter of global wheat exports and have been disrupted due to Moscow's invasion of the Eastern Europe country. Ukraine, alone, accounts for 10% of global wheat exports.
Weather and geopolitical issues suggest global wheat crop supplies could come under pressure as stockpiles worldwide dwindle. This may continue to place a bid under crop prices and result in high food prices. This is one situation that global central bankers can't print their way out of.