Global wheat prices cooling with larger exporter supplies expected in 2023

After reaching historic highs in May 2022, U.S. and global wheat prices have since cooled as supply concerns for many key wheat exporters have abated. Wheat export prices for the United States, Russia, and France in July 2023 are all well below the peaks observed in May 2022 as an effect of Russia’s invasion of Ukraine in February 2022. Ample wheat supplies expected in the 2023/24 marketing year (July–June) in the European Union, of which France is a member, and Russia are contributing to low prices for those exporters. Markets recently reacted to the July 17 expiration of the Black Sea Grain Initiative, which had sustained Ukraine’s exports through the Black Sea for nearly a year. Russia’s subsequent attacks on Ukraine’s port infrastructure were further reflected in global wheat prices. However, Ukraine is expected to continue shipping some commodities via alternative routes, so price changes were relatively minimal compared with more extreme swings at the start of the conflict. Prices for other suppliers, such as France, were up slightly from May 2023 but 27 percent lower than in July 2022. U.S. hard red winter wheat export prices decreased 10 percent in July 2023 from July 2022 and were 34 percent lower from May 2022. Even so, they are higher compared with other key exporters, partly driven by ongoing drought in major U.S. growing regions. This chart is drawn from the USDA, Economic Research Service Wheat Outlook, August 2023.

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