Wheat market is becoming more stable

16-04-2021 | |
Photo: Peter J.E.Roek
Photo: Peter J.E.Roek

The forecast of more wheat consumption by China in particular has pushed up prices in the futures market and in day trading. Incidentally, this is a derivative of the high demand for maize, which is therefore expensive.

The prices on the futures markets for grain and oilseeds were strongly dominated by the broken weeks as a result of the Easter weekend. Attention was also paid to the terms of the financial year that expired in the business sector (financial institutions and investment companies). Also not to be forgotten is the USDA monthly report released on Friday, April 9 by the US Department of Agriculture on the state of the world market for agricultural products.

China consuming more wheat

Wheat prices rose sharply in Chicago, up 4.5% from the previous week. The USDA reports that global closing stocks are not rising slightly, as market analysts thought, but falling further than indicated a month ago. It is mainly because China is consuming more. The corn price, which is now so high, is undoubtedly to blame.

Concerns about drought in the US

For Chicago, this was a reversal of a price level that actually began to slowly slide from the beginning of March, which is still 10% to 15% above that of last year. Wheat prices are given extra support due to ongoing concerns about the drought in the Midwestern United States. Sowing summer cereals is behind schedule in Russia and Ukraine. The condition of both wheat and barley is still very good in France, according to the latest report by FranceAgrimer, but it dates from before the last cold snap.

Corn market’s influence on wheat market

In Paris, the rise in the wheat futures price (contract in May 2021) was less rigorous. However, there the maize market has less influence on the wheat price trend. For the United States, the corn market is in tune. This is happening through the influence of increasing domestic consumption and smoother exports. Also on Monday April 12, corn prices on the Chicago futures market were quoted green.

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Jack Kwakman Freelance journalist