Wheat suffered from falling prices in the futures markets last week. The first expiring contract in Paris dropped almost 5.5% in price and in Chicago prices fell around 4%.
Wheat futures markets took a big step back following the news about the discovery of the new corona variant omicron. Fears of economic consequences resulting from this made investors decide to cash in their profits and then go on hold for a while.
Other reports were also not very promising for people who assume further price increases. In the southern hemisphere, yields appear to be even better than previously thought. Australian Abares raised its wheat yield forecast to a record level of 34.4 million tons. Abundant precipitation in some areas of northern and central New South Wales will not have a major effect on the overall figures, Abares said.
In Argentina, a large wheat crop of 20.3 million tons is also expected. The Statistical Office in Canada also revised the wheat forecast for Canada to 21.65 million tons. Although this amount is 38.5% smaller than in 2020, it is somewhat higher than estimated in September.
Also reports about a Russian export quota for grain and specifically for wheat from mid-February are keeping people busy. As far as wheat is concerned, there is talk of an export quota of 9 million tonnes. A discussion about this measure also put some price pressure on the futures markets.
Despite the price drop in the past week, the market still seems to be on a solid foundation. This is mainly due to the fact that large orders regularly pass through the market. For example, Egypt has placed a very large order for wheat from the Black Sea region. The expectation is that the market will pick up again due to the continued demand.