Lowered production and area forecasts for wheat and maize are driving grain prices. Pressure on Russian wheat exports is also an important factor for the price increase of wheat.
Within the last 2 weeks in Paris, the price of the wheat futures contract for March 2021 rose by more than € 15. In the previous week alone, the increase was almost 7%.
Chicago also saw a sharp price increase for wheat in the past week, while in the short period before that, the brakes were slightly off. Apparently, the market has wanted to wait and see the US Department of Agriculture’s monthly Wasde report. Although this indicated a stronger than expected growth of wheat acreage in the US, it did not lead to price decreases. The downward revised forecast for closing stocks this season was too strong for that. Both the EU and Canada have favourable prospects for their exports, due to tighter wheat supplies.
The price increase for wheat contracts is strongly related to the export levies that Russia will introduce in mid-February. They will be doubled again from the “starting rates” 2 weeks later. The International Grains Council has also adjusted the monthly forecast for world wheat production downwards slightly, but that is less important.
A very steady mood also applies to maize. The Wasde report reported a reduced estimate of the corn crop in the US. The coming maize production in Argentina and Brazil is now also estimated to be lower. The quotation for the March 2021 corn contract rose by € 5 in Paris last week to a new peak of € 212 per tonne. In Chicago, the price for the March 2021 contract rose even more; this is now for the first time (well) above the 500 dollar cents per bushel. That is converted to approximately $ 210 per ton. The closing listing fell back a bit on Friday, due to profit-taking by investors. After all, the level has risen significantly.
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