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Bloomberg reports this year’s wheat crop will be up 4.3 percent to 690 million metric tons, just shy of the biggest crop ever from two years ago.
Analysts think prices will drop by 17 percent, to around $6 per bushel, by the end of the year. That’s not the only good news: the UN expects a record global rice harvest and the U.S. says we’re looking at the largest-ever crops of corn and soybeans. (Beef prices will likely still rise this summer.)
But while snow and lots of rain have eased drought effects, another especially dry summer could change everything. Bloomberg points out wheat averaged about $6.41 between January and May of 2012, then spiked to $9.47 in July. Those seven weeks of drought raised prices more than 50 percent, and it could happen again.
For what it’s worth, though, the market seems to expect it won’t. Bloomberg says, “Hedge funds and other large speculators have been betting on lower prices since December.”