Wheat market catches its breath

10-11-2021 | |
Photo: Canva
Photo: Canva

In Paris, the wheat market took a step up last week, but in Chicago there was a small minus on the stock exchange screens.

All in all, the market seems to be taking a breather after the sharp price increase in recent weeks.

Wheat demand to exceed production

In general, it remains true that the traditional import countries ensure a very good demand for wheat. Demand is expected to exceed production. The market has already become accustomed to this. And that has already been included in the prices, because there was actually no news on this front in the past week.

Russia puts pressure on EU wheat exports

On the other hand, there were reports that had a somewhat price-pressing effect. For example, a market analysis agency expects that the Russians will export slightly more wheat than previously thought. This means that there will be slightly more competition from Russia for EU wheat.

Wheat exports to Egypt down

For the time being, an export of 34 million tonnes of wheat is now assumed. 15.9 million tonnes of this has now been exported. Mainly due to lower sales to Egypt (-45%), this amount is about 15% smaller than a year ago. Turkey, Kazakhstan and Latvia import more wheat, but that is not enough to compensate for the lower export to Egypt.

Precipitation in Argentina

The Americans are expected to sow more wheat, which will increase wheat production in 2022 (see box below). That message is also causing some price pressure at the moment. And precipitation in Argentina means that the yield potential there is slightly better after the recent drought.

Chicago wheat trade

All in all, wheat trade in Chicago ended last week at a level of $7,665 per bushel, which translates to about $245 per tonne. The quotation is slightly lower than the week before. In Paris, trading in the December contract closed at 287.75 per tonne. As a result, the stock market ended almost €10 below the highest level reached at the start of the week.