Prices of the three major grains – soyabeans, wheat and corn – have risen strongly this year (Chart 1). There are several factors involved, but highly unusual global weather patterns are not among them. Rather, there have been some production, transport and processing bottlenecks related to the lockdowns, as well as idiosyncratic factors.

While grains prices naturally spike on occasion due to the vagaries of weather across the major growing regions, it is rare for all three to rise by double-digits simultaneously. Yet this is precisely what has happened in recent months. Wheat and corn prices are up some 12% y/y, and soyabeans are up over 30%, the largest such rise since 2016. Grains are a major source of nutrition (and soyabeans of protein too) for much of the world. As such, if this rise is sustained for a full season or more, it will likely place upward pressure on food prices generally.