We’ve talked a lot about “back to the 70’s” over the past year or two. The increased focus on energy, security and old school production bring memories back to decades of past. However, we may also have to go “back to the 1700’s” as wheat production and prices are very much back in the picture! That’s what we’ll dive into in this edition of the Great Game, where we weigh different potential market shocks caused by political developments and why developments in India are actually more important to the wheat prices than Ukraine and Russia.

The War effect

Obviously, the spark that put the spotlight back on wheat was the Russian invasion of Ukraine. Let’s take a look back:

Obviously prices spiked after the February 2022 invasion, but gradually fell to more normal levels during the summer of 2022. Recently, the Ukrainian attacks on the Crimea Bridge in late June and the Russian retribution on the Port of Odesa caused another spike, which was more or less replicated last week as Ukraine attacked the Novorossiya port. It’s clear that the war has huge short-term effect on the wheat prices, so let’s start with the outlook there.