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Grain markets maintain high price levels

The demand for wheat and especially corn keeps world prices at a solid level. Corn is very popular still due to the demand from the Chinese market.

Last week, there was some pressure on wheat quotations in Chicago. Apparently, the latest WASDE monthly report from the US Department of Agriculture (USDA) has been influential. WASDE, which reflects the current state of affairs in international agricultural markets, hardly changed the American wheat balance. These price movements are not shocking, but still indicate that the wheat price momentum in the US is down.

The demand for wheat and especially corn keeps world prices at a solid level. corn is very popular, still due to the demand from the Chinese market. Photo: Mark Pasveer
The demand for wheat and especially corn keeps world prices at a solid level. corn is very popular, still due to the demand from the Chinese market. Photo: Mark Pasveer

In Paris, the wheat price for the first expiring contract (December 2020) reached a new peak of € 210.00 per tonne on Friday 13 November. It has been above € 200.00 for 2 months now. Wheat prices on the physical market remain at the highest level of this season. Wheat is in high demand worldwide, and European – especially French – wheat is currently competitive. Barley continues to gradually become more expensive.

Futures market
Overview of futures prices for: corn, wheat and soybean

Demand on the grain markets remains strong, with China as the main importer and driving force. Important to note for the level of winter wheat is that market agency Agritel reports that climate conditions in France and the rest of Western Europe are currently good, but that it is still too dry in Russia and all of America.

Corn: improved offer

Corn has been doing well on the futures markets in both Paris and Chicago for a few weeks now. In the physical trade, it is now noticeable that there is some harvest pressure. Improved supply in the short term, on the other hand, does not really lower prices: instead, prices stabilise. In the United States, all eyes are on exports. China appears to (want to) import considerably more than previously expected. The WASDE report of 10 November has increased the forecast of China’s corn imports in the current season from 6 to 13 million tons. Market experts wonder whether this might not be much more, and make estimations of 22 to 25 million tons. According to the agricultural-economic site Agrimoney, Chinese buyers would have already asked for prices for 2021.

With regard to current corn prices, fact remains that the EU will import less from Ukraine, because the country’s harvest is disappointing. The EU will have to turn to the US, as Brazil is currently sold out.