Wheat prices post sharpest drop in over 2 years amid easing geopolitical risks

Wheat prices plummeted by 12.7% in September to $6.75 per bushel, the sharpest monthly decline since June 2024, after reaching an intramonth peak of $7.95, as a potential peace deal between Russia and Ukraine, favorable weather conditions, and declining demand came to the fore.

Climate and geopolitical developments influenced wheat's supply and demand, but the commodity still ended the month around 35% above its initial value at the start of the year, having concluded January at the $5-a-bushel level.

Zafer Ergezen, a futures and commodity markets expert, told Anadolu that earlier price rallies were supported by supply risks affecting Black Sea grain exports, but recent market dynamics shifted downward as US-Russia relations developed positively.

“Along with the El Nino effect being weaker than expected, a short-term weakening of US wheat exports and concerns over a global economic growth slowdown are among the main drivers pulling wheat prices down,” he said.

With the prices of Russian and Ukrainian wheat falling, US wheat remained expensive relative to European wheat, decreasing demand for wheat produced in the US.

“American wheat was expensive due to the stronger dollar, driving up the dollar cost of wheat, which is among the factors that made European wheat more attractive,” he added.