The summer fires that burned up areas of Russia’s farmlands are extinguished, and the summer heat is fading, but the wheat crop may not be recovering quickly. Local estimates are that about half of the winter wheat crop has been lost to dry weather. With only sporadic rains, only half of the wheat that was planted has grown fast enough that it can survive the winter freezes. Large areas in Russia also have not been planted because of the drought. Meanwhile, in Canada, heavy rains appear to have diminished that country’s wheat harvest. Pakistan too has been hit with bad weather, with floods ruining perhaps a tenth of the wheat crop there.
People in Europe seem to be pointing to the ban on Russian wheat exports as the cause of higher prices for grains, yet the only place where a shortage looms is in Russia. Russia normally exports about a fourth of its wheat crop, but some experts believe even with an export ban in place, Russia could use up its stockpiles by March. The government believes the stockpiles will be sufficient until June, when new harvests begin.
Similar confusion is found worldwide in projecting wheat supplies. The Canadian Wheat Board is projecting the largest worldwide wheat harvest ever next year. In Europe, though, economists are worried about shortages that might last through most of next year, and the United Nations is holding an emergency meeting to address the possibility of grain shortages.
Amid all this confusion, there is little chance of a repeat of the problems of 2007. Then, speculators created spot shortages of rice and other grains in major cities, leading to hoarding that created more spot shortages. Commodities speculators are no longer sufficiently funded to pull off a repeat of that turmoil, even if they were to attempt it.