*Unit: U.S. cents per bushel
Overview
Wheat prices broke to an all-time high of US$13.64 a bushel at the start of the month due to heavy buying from speculators who correctly predicted that wheat from Russia and Ukraine would face severe supply problems. Together, the two nations supply c26% of the world's wheat exports, according to the latest USDA data, and shipments through the Black Sea remain disrupted.
The price has since retraced 19% from the highs but is still at US$11.12, a level not seen since the 2007-08 global food crisis. Developing countries will be particularly hard hit due to their price sensitivity and reliance on wheat, with many consuming over 40% of their calories from the crop compared to only 20% in developed countries.
Quantitative 12-month forecast
Our machine-learning model forecasts wheat futures to rise a further 13.8% over the next six months to US$12.65 a bushel; however, these ultra-high prices are expected to be transitory and should begin to turn down by October, ultimately ending up at US$9.30 by March 2023 and close to pre-conflict levels.