WHEAT prices on some US futures exchanges made their biggest gains in six years while Europe is frantically assessing the damage to crops from deadly floods that have wreaked havoc in Germany, the Netherlands and Belgium in particular.
World weather has created a potent bull market in the wheat sector with investors now seriously concerned about tightening supply and demand, especially in high protein wheat grades.
Chicago Board of Trade September wheat futures have soared through the US700 cents a bushel mark on the back of expanding concern regarding the North American wheat crop.
The failure of the winter wheat crops in the Pacific North West has been widely spoken about but now heatwaves are decimating the Canadian crop and there is concern about the US spring wheat crop.
The US Department of Agriculture has downgraded spring red wheat production 42 per cent on 2020 tonnages.
Across the Atlantic, furious storms caused some of the worst flooding on record in Germany, Europe's second biggest wheat producer, as well as in the Netherlands and Belgium.
And the production woes extend further.
In central Asia Iran and Kazakhstan, both significant wheat producers, are suffering from drought that is likely to mean markedly smaller crops this year.
With all the weather concerns leading into harvest analyst Malcolm Bartholomaeus, Bartholomaeus Consulting, said wheat supply and demand had become a story in its own right.
"For much of the time this year the focus has probably been on soybeans and corn and wheat has followed them up in step," Mr Bartholomaeus said.
"This time we're looking at an emerging story in wheat itself and the balance sheet is getting tight."
Further to that, Mr Bartholomaeus said there were likely to be issues in transporting existing grain stocks, due to flooding in German river ports.
There may be some sectors of the wheat market that benefit more than others.
In particular, he said the crop woes were impacting regions with traditionally high protein grain, meaning a large spread may emerge between high and low protein wheat grades.
In Canada, a recent crop report from the important wheat growing province of Saskatchewan found that an ongoing heat wave was taking its toll on the upcoming harvest.
Sustained heat, combined with hot winds and negligible rainfall has sent crops into a near terminal decline.
And to add insult to injury there is also an emerging problem with locusts.
Through Europe, a low pressure system that remained virtually stationary caused some areas to receive nearly double their July rainfall in just 48 hours led to deadly flash flooding.
While the focus is currently on the acute salvage program, authorities are starting to look at the damage to agriculture through the north-west of the continent.
The European Union has declared that farmers in Germany, the Netherlands and Belgium who had been affected by the floods would be eligible for support.
The EU agricultural commission is looking at initiatives that could help farmers in the region such as advance payments and exemptions from duties.
In Iran, the nation is suffering through its worst drought in 50 years.
Al-Jazeera reported there has been rioting as a result of water shortages in the province of Khuzestan.
The story Erratic European, US weather sends wheat prices higher first appeared on Farm Online.