Posted on May, 14, 2024 at 10:14 am
Although Russia is used to freezing temperatures, their wheat crop was not prepared for what expects are calling a “historic freeze” last week. The frosty temperatures most likely caused widespread damage to this year’s wheat and rapeseed crop in areas of Russia, Ukraine and Kazakhstan. This mid-May freeze was also felt by worldwide commodity markets as U.S. wheat futures rose to their highest finish since August on May 10.
Some reports indicate three of Russia’s crucial wheat regions have declared states of emergency due to the freeze damage. Due to previous issues with the crop, agricultural research firm SovEcon has reduced its expectations for the 2024 Russian wheat crop by 3.4 million metric tons, bringing their estimate to 89.6 million tons. Damage from this most recent freeze has not been figured in to these estimates, but all signs to point to even lower crop predictions.
As the war continues in Ukraine, this freeze event could weaken the strong wheat export market Russia has been building in Black Sea area and keep wheat prices and demand higher in the U.S. Russia is the number one exporter of wheat, but the weather circumstances could open new doors for more U.S. exports and higher commodity prices overall. However, the overall long-term effects of this late freeze on commodity markets remain to be seen as the full extent of the damage is unknown.
Source: High Plains Journal