Sustained demand prompts wheat prices to rise even further

27-10-2021 | |
Photo: Canva
Photo: Canva

Prices on the futures market in Paris rose by about 1.5% last week. The price of the December contract has already risen to € 280 per tonne. The price fluctuations of wheat and other grains this year, remain unusual.

Until mid-April, the price of the December wheat contract in Paris remained at around €200 per tonne. After that, the tight market for old harvest maize set things in motion. On May 7, wheat peaked (on December) at €230 per tonne. After that, there was a slight slump in the market.

Wheat price increased to €280 per tonne

At the beginning of July, buyers had to pay less than € 200 per tonne. Then, the price increase really started and more than a month later the quotation suddenly stood above € 250 per tonne. And after that, the throttle was slowed down a bit and then full throttle again from mid-September. The €260 mark was passed on October 1, and 2 weeks later the 270 hurdle was cleared to push through to €280 last Friday.

Demand from wheat-important nations

At the moment, it is mainly demand from wheat-importing countries that fuels the mood in the wheat market. This is especially true in Europe. In addition, in the United States, the sowing of new winter wheat is slower than normal. This can have consequences for the next harvest, because a later sowing gives a greater chance of wintering. For the time being, it remains fairly calm on this front. In contrast to the sharply rising quotations for this harvest, the price development for wheat from the 2022 harvest seems to stabilise at a relatively high level this month.

Export duties Russia

Russia is raising its export duties higher and higher. For the coming week, the duty on exported wheat stands at $67 per tonne (€ 57.60 per tonne). In June, Russia started an export tax based on an indicative wheat price. At the time, that was a levy of about € 25, which has now more than doubled. The indicative price on which the levy is based has increased by €50 to almost €255 per tonne in that period.

Corn prices

Corn prices fell mid-month, as harvest forecasts were revised upwards. After this correction, however, an upward trend can be seen in prices. In Paris, the November contract increased by 1.4% to €249 per tonne last week. This brings the price back to the level of earlier this month. In Chicago, corn prices for first-dated contracts were up 2.3% after falling 1% in the previous week. With this, corn in Chicago is again approaching the level of the end of September.