EU wheat market takes US in tow

20-10-2021 | |
Photo: Canva
Photo: Canva

The wheat market in the European Union is currently taking on trade in the United States. Rising prices on the futures market in Paris is also causing prices on the dashboard in Chicago to go up.

Rumours about sales opportunities for French wheat to China provide a new impetus for price formation in Paris. This ended last week, as far as wheat prices are concerned, again in the plus. And that for the 5th consecutive week.

French wheat market

Last month China was the main customer for French wheat. Algeria a close second. This is creating strong sentiment on the futures market in Paris. And is reinforced by the slow maize harvest in France, which gives feed wheat more value as a substitute.

Trade in December wheat contracts closed at €276 per ton last week. That represented a price increase of 2.6% compared to the previous week. Compared to more than a month ago, wheat has risen in price by about € 35 per ton. In short, this cereal is very popular at the moment.

Maize production figures impact wheat prices

Higher maize production figures pushed wheat in Chicago down a bit in the middle of last week. But there too, sentiment turned under the influence of the optimism on the European mainland. In the end, wheat trading in the US closed at exactly the same price level as the week before.

Difference between Paris & Chicago markets

A striking difference between Paris and Chicago is that in the US a premium is paid for deliveries at a later date, while in Paris the first contract to expire is the most expensive. Delivery in May 2022 is about €10 lower in Paris than the December contract. In Chicago, converted € 232.50 per ton for the last month of this year, while delivery in May next year is € 5 at € 237.50 per ton.

Corn prices

Corn was slightly lower in both Paris and Chicago. The November contract in Paris fell by 1.8% to € 245.50 per ton. January delivery gave up almost 3% ground to € 237.75 per ton. These are the first price drops after 4 weeks in a row of higher prices. In Chicago, lower prices were already noted in the previous week and the price decreases in the past week were limited to about 1%.

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John Ramaker Commodities market editor, Boerderij