The supply of grains is limited due to a disappointing harvest and sufficient space in storage.
Grain prices are fairly stable. Earlier this week, the grain exchange in Rotterdam increased the quotation for EU wheat by € 2 to € 190 per ton. The quotation for EU feed barley rose by € 4 to € 172 per ton. The harvest is mostly done and the yields are below average.
European farmers are hardly selling the grain, because on the one hand they probably don’t need the cash flow immediately. And on the other hand, the harvest is a bit disappointing and therefore there is sufficient storage space available. This means there is no immediate need to sell. This is noticeable for the trade, because the supply remains limited.
Coceral, the European trade organisation for grain, has reduced the forecasted grain yield in the EU to 295.5 million tons. A year ago, 311.6 million tons of grain were harvested. The lower revenues also contribute to lower exports. EU wheat exports this season, from July 1 to August 23, are 47% lower than a year earlier.
Only 1.9 million tons of wheat have been exported this season. At the moment, exports are not as smooth due to the low water levels in European rivers. As a result, the ships can take less cargo and the inland shipping costs are higher. That makes the final price for this grain higher.
Overview of futures prices for: corn and wheat
The prices for wheat are generally not very high, as there is more than enough supply. Also the corn supply seems to be sufficient worldwide. Although the balance between supply and demand is expected to be a bit tighter, because unfavourable weather in America could lead to lower corn yields.
Coceral has also adjusted the expected corn harvest in Europe downwards by 2.6 million tons to 64.6 million tons. That will support the European corn price. The EU corn price is therefore more than € 15 higher than a few months ago.
This weeks forecast is: Reasonably stable wheat price.