Commodities

Record Rainfall in U.K. and France Threatens Wheat Crop

Record rainfall is posing a significant threat to wheat crops in the United Kingdom and France, raising concerns about potential impacts on global prices and food security.

In France, the largest wheat producer in Europe, farmers are preparing for what could be their worst harvest in over a decade, as relentless rain has inundated fields and devastated crops. Similarly, the United Kingdom, another major wheat producer, is experiencing reduced wheat production due to the same heavy and persistent rainfall.

As a result, wheat prices across Europe are expected to increase in the coming months, driven by the shortages in both Britain and France, which are likely to pressure global supplies. Reports indicate that prices for wheat-derived products, including bread, biscuits, and beer, are already rising in both nations.

At the beginning of the year, forecasts estimated a 17% decline in the harvests of wheat, barley, and oats in Europe for 2024. However, that figure has since been revised to over 30%.

This situation could worsen food security worldwide, as wheat exports from the U.K., France, and other European countries are anticipated to decrease in the months ahead. Concurrently, wheat farmers in the U.S. are grappling with the effects of two years of severe drought, which has adversely affected their crops.

In the U.S., farm income is projected to decline by 25% year-over-year in 2024, marking the most significant annual drop on record, according to the U.S. Agriculture Department.

Currently, in Chicago, wheat is trading at $5.80 per bushel, reflecting a 16% decrease over the past year and hitting a six-week low.

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