Last Friday, November 26, the omicron variant, a new variant of the coronavirus, led to new travel restrictions around the world.
The mutation was first discovered in southern Africa. The impact of the omicron variant will remain unclear in the coming weeks. Therefore markets are reacting very volatile. This also applies to the various futures markets where prices fell sharply last Friday, November 26. The first expiring contract for milling wheat on the futures market in Paris fell below €300 per tonne on 26 November. Long-term contracts, which expire in 2022, also took a step down last Friday. US prices and the Black Sea region also saw a sharp fall in prices.
Egypt is benefiting from the drop in prices by launching a new tender for wheat in the period 9 to 20 January 2022. Egypt is heavily dependent on wheat imports and has been hit hard this season by the international high wheat prices. If Egypt imports the same amount of wheat this year as the previous year, the bill will be nearly $1 billion higher, the Middle East Eye news site reports. And the country can’t afford to do without that extra money.
Although grain prices have been under pressure since the end of last week, the level is still high. Good wheat demand combined with limited availability and increasing political tensions in the Black Sea region are supporting prices; in Russia, export taxes will rise in December. The demand for maize is also good, partly due to the continuing demand from the ethanol industry.
The corn price on the futures market in Paris also moved downwards at the end of last week. This followed the falling wheat prices. In the US markets, the price of corn continued to rise at the end of last week. Better-than-expected corn exports from the US supported US corn prices.