Is global wheat going to be tense again? The weather in the United States has suddenly changed, and the prices of wheat and other agricultural products have collectively risen!

Since the outbreak of the global epidemic in 2020, international food prices have continued to rise.

Coupled with the outbreak of the Russia-Ukraine conflict this year, food prices have been pushed to the forefront.

We all know that among the factors driving up food prices, in addition to the mismatch between supply and demand, high inflation and rising costs, another important factor is extreme weather.

For example, affected by La Ni?a last year, North America suffered severe drought, which reduced wheat production, while heavy rainfall in Europe also hit wheat harvests that were expected to be bumper. As a result, the global wheat market suddenly changed from wide to tight, and prices fell. Instant rise.

And this year it has become even more intense.

First, affected by extreme heat and drought, India issued expectations of a reduction in wheat production, forcing India to suspend wheat exports.

Similarly, Europe has also encountered a once-in-a-century high temperature and drought weather, which has caused an expected decline in the output of crops such as corn and wheat.

Similarly, nearly half of the United States was previously in a drought state, which even caused the water level of the Mississippi River to drop significantly and affected shipping.

However, with the arrival of winter, the drought in the northern hemisphere has been alleviated. At the same time, against the backdrop of peaking inflation and declining economic expectations, commodity prices have also fallen, including Food prices.

Secondly, the Black Sea Port Agreement was successfully renewed, which also eased the tight global food supply. In particular, the price of wheat, which once soared, has now basically fallen back to the level before the Russia-Ukraine conflict.

Thirdly, at a time when many countries are issuing expectations for reductions in grain production, Russia has ushered in a bumper grain harvest.

Wheat production has reached a record level, which to a certain extent has also increased global wheat supply and eased market supply and demand.

As a result, wheat prices continued to fall.

But at this time, the United States, the world's largest food exporter, once again encountered extreme weather.

According to media reports, recently, a "super cold wave" is rapidly moving south from the northern states of the United States and sweeping across many places in the United States. The temperature in many places in the United States was once close to minus 50 degrees Celsius, and more than 2/3 of the Americans were issued storm warnings.

Obviously, this degree of cold wave is beyond expectations.

Affected by this, many places in the United States are facing power supply interruptions and natural gas and other energy sources are paralyzed. Ice has occurred in Texas and other places, causing liquid in pipelines to freeze, and natural gas production has been forced to shut down.

At the same time, this "super cold wave" has also intensified people's concerns about food production.

As the world's largest grain exporter, the United States mainly exports corn, wheat and soybeans. Among them, wheat exports are second only to Russia and the European Union, while corn and soybean exports rank third in the world. one.

This means that U.S. grain exports play an important role in global grain trade.

However, due to the impact of the super cold wave, crops will face the risk of freezing, and the market's expectations for crop yield reductions continue to rise. Grain from some key production areas has been listed as the object of continued focus collection.

Among them, the price of hard red winter wheat in Chicago in the United States has risen for several consecutive days, becoming the longest rising trend since August.

If there is a significant reduction in wheat production in the United States, the international wheat market is bound to be turbulent again.

So, what is the risk to global wheat next year?

First of all, judging from the trend of this year, due to the impact of the Russia-Ukraine conflict at the beginning of the year, international wheat soared to a high level. However, as the market gradually digested the Russia-Ukraine conflict and the Black Sea Port Agreement was steadily renewed, Coupled with inflation peaking and falling, the trend of wheat has also eased significantly.

On the other hand, Russia, as the world's largest wheat exporter, has had a bumper wheat harvest this year, and Russia is currently discounting heavily and increasing wheat exports.

However, it does not mean that global wheat is safe.

Because on the one hand, after experiencing this tight global food supply and demand, all countries attach great importance to food security. Food-importing countries have begun to increase their food imports, while producing countries have begun to consciously tighten exports and food protection. The momentum of ism continues to rise.

This means that although supply has increased, demand has also increased.

Secondly, extreme weather has occurred frequently in the past two years. For example, last year was affected by La Ni?a, which caused global food turmoil. In the first half of this year, it was affected by high temperature and drought, and the global food market was also in chaos.

So it is foreseeable that the weather next year will probably continue to interfere.

Under such circumstances, it is difficult for global food to recover from the turmoil.

Thirdly, the market has not yet made a precise assessment of how much impact this cold wave will have on U.S. wheat, and there is no clear conclusion on the impact on the wheat market next year.

But what is certain is that the wheat market next year may not return to calm as planned.

And according to market forecasts, global wheat supply and demand will remain unstable next year, and corn will be even worse than wheat. What are the risks of corn? Welcome to collect "New Agricultural Outlook" and continue to analyze it tomorrow.