Wheat Market Surges on War Premium, Drought Concerns

The global wheat market is experiencing an upward trend due to several factors, according to Scott Custard, vice president of Nebraska-based Moving Parts LLC. Global conflicts are a primary driver, with war premium contributing significantly to price increases.

Custard notes that the world market is concerned about the availability of Black Sea bushels, which could lead to supply chain disruptions. However, he believes that U.S. wheat fundamentals do not support prices reaching $7.00-$7.50 per bushel.

Another factor supporting wheat prices is the low total acres planted by U.S. farmers in the last 149 years. Custard attributes this to a decrease of about 20% from last year's production, with spring and white wheat showing some improvement.

Drought conditions in the U.S. plains and Europe are also contributing to higher prices. The USDA's Small Grains Summary, due out on September 30th, is expected to provide further insight into this year's wheat production.