Wheat and Coffee Prices Surge on Supply Disruptions and Demand

Wheat prices surged for the third straight session on October 5th, driven by supply disruptions and rising demand. December Chicago wheat futures climbed 1.4% to $254.4 per ton, while Kansas wheat futures rose 1% to $272.6 per ton. The price hike was fueled by concerns over supply disruptions in the Black Sea region, port and shipping issues, and strong import demand from the Middle East and Asia. Incidents at the Ukrainian port of Odessa and problems involving a Turkish grain ship in Romanian waters exacerbated these concerns.

The Rosario Grain Exchange reported an 80% drop in wheat exports from Russia and Ukraine in September compared to previous years. Ukraine's wheat exports fell 43% year-on-year, while Russia's consulting firm SovEcon cut its export forecast by 4.7 million tons due to higher transportation costs. The decline in Black Sea supplies led importers like Saudi Arabia to increase purchases, with the Saudi General Food Security Agency buying 683,000 tons of wheat, 27.7% more than initially planned.

Argentina's wheat exports hit a record high in September, surpassing 1.05 million tons, a 23% year-on-year increase. Meanwhile, the US Department of Agriculture noted that planting of the 2026-2027 winter wheat crop in the US reached 36% of the acreage, with a germination rate of 16%. However, US wheat growers face rising input costs, including higher diesel and nitrogen fertilizer prices, which are pushing production costs above farmgate prices.

Coffee prices also rose for the third consecutive session, with Arabica coffee up 1.32% to $6,449 per ton and Robusta coffee rising 1.7% to $3,528 per ton. Concerns about Brazil's coffee production, the world's largest, due to heavy rains and quality issues, contributed to the price increase. Colombia's Arabica exports also declined 10.1% year-on-year, further tightening supply. Managed money funds increased their long positions, reflecting medium-term supply shortage risks.