West Central Ag Grain Comments 07/23/26 8:55:11 AM
7/23/26
- Crop prices rose to a three-year high as heat waves and escalating attacks in the Black Sea threaten to disrupt global grain trade, reviving risks to food inflation that have also been stoked by the war in Iran.
The Bloomberg Agriculture Spot Index, which tracks 10 major crop products, reached the highest since July 2023 on Wednesday, following a seven-week advance.
Prices had earlier peaked in May on crop worries from strained fertilizer and fuel flows from the Strait of Hormuz, before the risk premium faded the next month. Now, crops are rising anew as fresh war and weather risks emerge.
Energy markets have rallied as the Middle East conflict escalates and Europe’s grain harvests are being hit by blistering heat.
Meanwhile, wheat prices are climbing as intensified attacks by Russia and Ukraine on each other’s export corridors curb trade.
If the rally persists, it could ripple through the food supply chain, lifting costs for staples from bread and cooking oil to meat and dairy.
Although large stockpiles remain for many major grains after bumper harvests in recent years, the return of the El Niño weather phenomenon has also added to concerns about smaller crops, with futures for coffee and cocoa rising in July.
What really drives the market is whether there is physical supply coming to those who need it.
While factors such as heat and the tensions in the Middle East have been building for weeks, the Black Sea conflict was the straw that broke the camel’s back.
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