Wheat Prices High Amid Concern for Russian Winter Crop

By Chowa Cho
Chowa Cho
Chowa Cho
August 4, 2010 Updated: August 5, 2010

The severe summer drought in Russia has led to market speculations that drove wheat prices to the highest levels in 13 months and in July wheat prices made the greatest monthly gain since 1973, according commodity market statistics.

The European Commission has cited concern for winter crops in Russia, which "will be severely affected,” especially around the Volga River, if the hot and dry conditions continue as forecast, according to analysis by the EC's Joint Research Centre.

However, despite adverse weather in certain parts of Europe this summer, the European Commission projects that total European grain yield will be about the same as the past five years. There will even be a slight increase in grain yield (5 percent per hectare), though the amount of cultivated land has decreased, according to a research released Aug. 4.

A severe winter with low temperatures across Europe from December through March, including snowfall in Spain, delayed the growing season.

Spring and summer droughts in parts of the U.K., western France, northern Germany, eastern Poland, and Greece; and flooding in eastern regions, Poland, Hungary, Romania, the Czech Republic, and Slovakia, destroyed many crops.

However favorable conditions, abundant rain and sun, in Italy and Spain are enabling good yields in those countries.

Chowa Cho