The pressure of the incoming new crop of wheat is putting prices on edge. In addition, the difference between the rates of the euro and the US dollar is having an effect on the market, not to the advantage of European exporters.
Wheat prices on the Paris futures market started in a minor way last week, but then picked up again. We saw the same picture in Chicago. The trend for corn in Paris was also relatively low and a gradual increase in prices. Corn goes up and down in Chicago. Wheat is under immediate pressure this week as the first supply of the new crop is underway in the Northern Hemisphere.
Wheat is under immediate pressure this week as the first supply of the new crop is underway in the Northern Hemisphere. Photo: Herbert Wiggerman
Trade is paying close attention to the progress of the wheat harvest
The trade keeps a close eye on the harvest progress and certainly also the development of the quality. In general, the harvests, with the exception of those from the United States and Australia, are not really easy. The British hectare yields and quality of the new wheat are still unclear, due to the enormous variation this season. These are the consequences of a hard winter for the crop and a dry spring.
Overview of futures prices for: corn, wheat and soybean
Growers hold grain
The agricultural-economic site Agrimoney reports a general tendency among growers to hold onto their grain, with the side effect of supporting prices. As soon as the harvest is received everywhere, that limited supply will naturally carry more weight.
Corn price expected to fall
In the physical market, the high exchange rate of the euro against the dollar has a negative effect on wheat exports from the EU. On the other hand, this facilitates the import of cheaper grain, especially corn. In the short term, maize is still fairly tight, but once the EU maize harvest is ready, and especially as soon as the maize comes from Ukraine, the price of maize will drop considerably.
In the US, the wheat price has to rely on the aforementioned euro-dollar ratio, which is favourable for the Americans. The corn market is somewhat more difficult for the US, as improved conditions for growth put pressure on the price, certainly taking into account that a lot can be produced with the current acreage.