Wheat market calms down after sharp decline last week

Photo: Shutterstock
Photo: Shutterstock

Stable to slightly higher prices at the beginning of this week, bringing the market to some rest. Trade needs that again after a week in which prices fell sharply. Paris dropped 4% for old and 5% for new crop last week. Chicago reacted even more violently; there prices fell by 10 to 11%.

Peace negotiations between Russia and Ukraine set the tone for the price cuts early last week. Although there has been further progress, the week also ended with falling prices. The latter was mainly attributed to disappointing export activities in the United States.

Insufficient demand at current price

The US does not seem to be able to benefit from the loss of the wheat flow from Ukraine and a temporary stagnation in exports from Russia. France seems to be in the same boat. The French do have wheat to export, but there is not enough demand at the current price level. Buyers prefer to move to Romania or Bulgaria because they can get it cheaper there. In addition, India is also being looked at as a possible supplier for the Middle East.

Russian wheat exports pick up steam

Meanwhile, wheat exports from Russia are picking up steam again. As of March 24, the Russians have exported 27.7 million tons of wheat, mainly to Turkey, Egypt and Kazakhstan. Consulting firm Sovecon raised its forecast for Russian wheat exports by 0.4 million tons to 33.9 million tons at the end of last week.

Logistics hamper Ukrainian grain exports

Ukraine has also returned to the export front. However, the quantities that cross the border are limited. This is because the country cannot use the common route via the Black Sea. Every effort is now being made to realize some export by land. As a result, 1.1 million tons of maize and 309,000 tons of wheat have now been exported to the West by rail. In addition, they succeeded in getting 108,000 tons of sunflower oil out of the country.