Wheat Prices Rise Due to Frost Risks in the USA and Russia and Geopolitical Tensions
Wheat futures on the Chicago Exchange have shown an increase for the second consecutive day, driven by concerns over potential crop damage from severe frosts in the USA and the Russian Federation. Record low temperatures have been recorded in the central and eastern regions of the USA, sustaining high grain prices. At the same time, overall risks to the harvest remain limited due to the presence of snow cover, which protects plants from the cold.
This is reported by AgroReview
Impact of Weather Factors on Wheat Harvest
According to meteorologist Tom Whittaker from Aura Commodities, a wave of severe frosts is expected to cover key regions for winter wheat cultivation in the USA in the coming days. However, significant crop losses are anticipated only locally, primarily in areas with insufficient snow cover. In southern and eastern territories, additional threats are posed by freezing rain. Meanwhile, the main areas planted with hard wheat varieties, especially in Kansas, are likely to remain largely unaffected by adverse weather conditions.
Market Situation and Geopolitical Factors
After a recent decline in prices, wheat prices have rebounded, particularly due to a reduction in large short positions held by investment funds amid growing concerns about the weather in the Northern Hemisphere. The overall strengthening of positions in commodity exchanges has also provided additional support to the market. As of last Friday, the price of wheat in Chicago increased by 0.8%.
Similar concerns are emerging in Russia, which remains the world’s leading wheat exporter. Although the unusually cold weather has not yet harmed winter crops, analysts from SovEcon warn that prolonged frosts could negatively impact the upcoming harvest. Soil temperatures currently range from –2°C to –8°C, which is not critical, but if the cold snap persists and temperatures drop to –12°C and below, the risk of plant death will sharply increase. Despite this, SovEcon maintains its wheat production forecast for Russia in 2026 at 83.8 million tons.
The Kremlin has stated that the “territorial issue” remains unresolved following Putin’s negotiations with American envoys Steve Witkoff and Jared Kushner regarding the latest peace plan.
Trading circles are closely monitoring the developments in the geopolitical situation. Negotiations between representatives of the USA, the Russian Federation, and Ukraine regarding a peaceful settlement are expected to continue in the United Arab Emirates today and on Saturday, which is also influencing grain price dynamics.