Wheat markets jumped when Russia invaded Ukraine in February 2022.
Nearby spring wheat futures hit a high of US$14 per bushel before declining for the next three years. Lows were hit in the fall of 2025 when spring wheat futures dropped to $5.45 per bu. in October.
Wheat staged a minor rally in the first half of 2026 before jumping higher in July. The market finally woke up to the seriousness of the situation in the Black Sea.
The conflict between Ukraine and Russia choked off wheat supplies from the region and slowed their export pace. This caused the nearby wheat contracts to rally by close to 60 cents a bu. over the past week.
Nearby spring wheat contracts are currently trading in the $7.65 to $7.75 range.
Most of the grain grown in Russia and Ukraine is exported through Black Sea ports. The main winter wheat growing areas of both countries are close to those ports.
This was a major advantage for exports from the region because the costs of moving grain through the region are relatively low. Even the spring growing areas in the upper Volga and Siberia regions in Russia ship some grain through the Black Sea region.
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The disruption of grain flow from the Black Sea has pushed purchasers of the grain to scramble to replace the tonnage in the spot market.
Although alternative routes exist for the grain for both countries, they have severe capacity and cost constraints.
In Russia, Baltic Sea and the Caspian Sea ports can only take up a small portion of the grain shipped from the Black Sea.
Ukraine can ship grain through the Danube ports as well as land shipments using rail and trucks to neighbouring European countries. These routes can only replace a small portion of the Black Sea exports from Ukraine.
This sharp reduction in exports from the largest wheat exporting region is driving prices higher. It will continue to be the case as long as shipments from the region are interrupted by the ongoing conflict.
There is no end in sight to the conflict after nearly four and one half years of fighting. That means wheat prices will continue to strengthen through this marketing year.
Wheat markets need to add a significant premium into the market to encourage planting of the 2027 winter wheat crop. The problem is that wheat prices are still uncompetitive with other crops.
Oilseed and corn prices have also increased over the past few months, which means winter wheat area in Europe and North America will see only limited changes in sown area.
Time is quickly running out for the wheat market to attract increased acreage for 2027.