Wheat prices plunged 12.7% in September to $6.75 per bushel, marking their sharpest monthly decline since June 2024. Prices had reached an intramonth peak of $7.95 per bushel before falling amid prospects of a potential peace deal between Russia and Ukraine, favourable weather conditions and declining demand.

Climate and geopolitical developments influenced wheat supply and demand, but the commodity ended September around 35% above its level at the beginning of the year, having closed January at approximately $5 per bushel, The Caspian Post reports, citing Anadolu Agency.

Zafer Ergezen, an expert in futures and commodity markets, said that earlier price rallies had been driven by supply risks affecting grain exports from the Black Sea region. However, recent market dynamics shifted downward as relations between the US and Russia developed positively.

“Along with the El Nino effect being weaker than expected, a short-term weakening of US wheat exports and concerns over a global economic growth slowdown are among the main drivers pulling wheat prices down,” he said.

As Russian and Ukrainian wheat prices declined, US wheat remained expensive compared with European supplies, reducing demand for American wheat.

“American wheat was expensive due to the stronger dollar, driving up the dollar cost of wheat, which is among the factors that made European wheat more attractive,” Ergezen added.