The HC Commodities Podcast: War and Wheat — Navigating Markets During Global Conflict

Host: Paul Chapman (HC Group)
Guest: Dennis Voznesenski, Agricultural Economist & Author
Date: July 15, 2025

Episode Overview

In this thought-provoking conversation, Paul Chapman welcomes Dennis Voznesenski, agricultural economist and author of War and Wheat: Navigating Markets During Global Conflict. Drawing on his book, Voznesenski discusses how agricultural—and particularly wheat—markets have responded to the stresses of World War I, World War II, and the modern Ukrainian conflict. The discussion reveals underlying laws that govern commodity markets in times of crisis, lessons from history, and the enduring importance of logistics, government intervention, and adaptability within the industry.

Key Discussion Points & Insights

1. Why Write About Wheat & War?

• Dennis began researching to truly understand what drives dramatic commodity price movements, beyond superficial explanations of “technical reasons” or fund positions.
• His analysis of days with notable wheat price moves (over 3%) revealed that the largest were almost all caused by politics, government actions, or conflict.
  • Quote:
    “I realised that the biggest price moves occur due to politics, due to governments getting involved, or due to conflict—they’re kind of wrapped together.” (02:38, Dennis Voznesenski)
• He meticulously dove through historical newspaper archives, tracking wheat markets during WWI and WWII from the Australian lens.

2. Markets as (Imperfect) Predictors of War

• Pre-World War I, only Germany notably stockpiled wheat; Allied nations did not, illustrating how markets often fail to predict imminent conflict.
  • Quote:
    “On the eve of World War I, it wasn’t like—outside of the Germans—anyone was really stockpiling wheat. Wheat prices weren’t really reflecting the coming global tragedy.” (06:45, Paul Chapman)
• Governments are hesitant to restrict food exports to rivals ahead of conflict, as it risks escalating tensions into outright war.
  • Quote:
    “If you go and tell your potential enemy that, hey, you can’t actually buy food from us anymore, that’s almost getting to the point of a declaration of war in itself.” (07:51, Dennis Voznesenski)

3. Commodity Laws of Crisis

• Geographic bottlenecks and supply limitations are constants: There are just a few global “breadbaskets” that countries can rely on for bulk food supply, both historically and now.

  • Example: China today relies overwhelmingly on South American soybeans due to scale limitations elsewhere, echoing Germany’s desperate WWII attempts to secure diverse global supply chains.
  • Quote:
    “There’s only so many places in the world where you can get sufficient commodities... whether it was 100 years ago or now, that hasn’t changed.” (11:44, Dennis Voznesenski)

• Control of logistics and routes is vital: Germany’s bid to secure colonial North Africa and connect to South America via the Mediterranean reflected a recognition of these immutable “commodity laws.”

4. The Essential Role of Government Intervention

• Wartime government intervention—such as Australia’s nationalisation of wheat under the Wheat Board—was often critical, stabilising markets and ensuring continued agricultural production despite vast logistical challenges.
  • Quote:
    “The government said, you know what, we’re going to nationalise the whole industry. Farmers, you keep farming, we’re going to pay you a minimum price…” (13:57, Dennis Voznesenski)
• Such interventions had lasting effects, shaping the structure of today’s big agricultural trading houses (e.g., Dreyfus, Elders).

5. Logistics: The True Power Broker

• In both world wars and the Ukraine conflict, shipping and logistics—not just raw supply—dictated the fate of global markets.
  • “Freight was just disappearing whenever a conflict began,” says Dennis, prompting governments to step in.
  • Ships were requisitioned, sunk, or abandoned; insurance became unaffordable or ceased entirely—paralyzing trade.
  • Quote:
    “Whenever a conflict begins...insurance companies went, no, this isn’t for us...the whole grains industry just came to a halt. That is what actually started prompting governments to get involved.” (20:11, Dennis Voznesenski)
• Modern parallels: Russia-Ukraine, Taiwan Strait, and the Straits of Hormuz could quickly hike freight costs or block food and energy flows.

6. Food Insecurity as a Strategic Weakness

• Hunger often topples governments; food logistics can become the difference between war lost and won (e.g., German collapse WWI, bread riots).
  • Quote:
    “If you can’t get enough food to feed your people, to feed your army, it’s kind of game over.” (41:31, Dennis Voznesenski)

7. Commodities: From Product to Asset Class

• The modern era introduces fast speculative money into commodity markets, amplifying volatility but not fundamentally changing directional price setting.

  • Short-term flows can overshoot prices; the physical supply-demand always “wins” in the medium-term.
  • Quote:
    “They [funds] don’t really pick the direction. When they see prices going up, they jump on...But they don’t pick the direction.” (27:55, Dennis Voznesenski)

• COVID exemplified this: prices initially fell as funds pulled out before rallying when physical shortages and logistics snarls hit.

8. Industry Structure: Adaptability and Private Power

• The most resilient firms own or control logistics — and the names dominating today are often those that managed crises a century ago (the ABCDs).
  • Quote:
    “The ones who survive have the most adaptability and the most flexibility...either they own [ships] or they charter a significant amount.” (35:29, Dennis Voznesenski)
• Agriculture stands out for private, global, logistical reach; in contrast, metals and especially oil are dominated by national or state interests, which can create different types of disruption.

9. Strategic Takeaways for the Future

• Large importers can’t hide stockpiling (ships can be counted; purchases visible).

• Large exporters need either their dedicated shipping fleets/navy or robust domestic demand (e.g., biofuels).

• Freight capacity is a perennial Achilles’ heel—and a source of power.

• Countries like Brazil may hold a privileged “neutral” position with both surplus food and energy.

  • Quote:
    “If you want to stockpile as a large country, you can’t really hide it...if you actually look at who’s buying what, it gives you a pretty good lens of what’s happening in reality.” (38:55, Dennis Voznesenski)

10. Commodity Markets: A Force for Global Stability

• Despite their vulnerability in crisis, integrated commodity markets foster global cooperation and interdependence, raising the stakes for peace.
  • Quote:
    “Commodity markets are absolutely a force for good now...one of the only key pieces of global cooperation that holds together because of how vital they are.” (44:42, Paul Chapman)

Notable Quotes & Memorable Moments

• On Commodities as Predictors
  “If you just track who’s buying how much, that’s a good way to track where geopolitics is heading.” — Dennis Voznesenski (38:50)

• On Historical Lessons
  “By analysing commodity markets at their key stress points, you can find out and understand what’s going on right now a lot easier.” — Dennis Voznesenski (43:02)

• On Adaptability
  “Who can actually shape their own destiny? It’s the ones that actually have control of ships.” — Dennis Voznesenski (35:27)

• On Stability through Commodities
  “The fact that you’ve got this specialization...enforces global cooperation. It does mean that it’s much more expensive and challenging to go to war because of these risks.” — Paul Chapman (44:17)

Timestamps for Key Segments

• [01:58] — Why Dennis wrote the book; drivers of wheat price volatility
• [04:32] — How market structures reflect wartime experience (national grain boards)
• [06:55] — Markets’ ability (or lack thereof) to anticipate war
• [09:35] — Commodity “laws” during crisis: global breadbasket limitations
• [13:28] — Positive (and negative) outcomes of government interventions in Australia
• [18:43] — Logistics as ultimate power and vulnerability
• [27:03] — Commodities as asset class; the impact of speculative funds
• [35:21] — The rise of the ABCDs and structural adaptability
• [38:50] — Tracking imports as a geopolitical signal; strategic implications for importers/exporters
• [42:34] — Positive lessons and realistic outlook for commodity interdependence

Summary

Dennis Voznesenski, in conversation with Paul Chapman, convincingly argues that war and geopolitics—not merely technical factors—are the primary drivers of major volatility and change in commodity markets. Through the lens of wheat, the episode outlines how logistics, government intervention, and industry adaptability have shaped not only the past but the very structure of the modern agricultural sector. The “laws” of commodity stress—dependence on a handful of supply nodes, the centrality of shipping and freight, and the importance of rapid adaptability—are shown to be as true today as a century ago. The discussion closes on an optimistic note: global interdependence in food and commodities, however fraught, is a stabilising force that often rewards collaboration and peace over conflict.

For more information and to purchase Dennis Voznesenski’s book, see the show notes.