Wheat market remains very volatile

Photo: Canva
Photo: Canva

Wheat prices are going up and down. Last week it was mainly profit taking that pushed prices down. But at the lower level, speculators are stepping back in and a Russian deal with China is also pushing prices up again.

Last week, price falls dominated. Tensions between Russia and Ukraine eased somewhat, paving the way for profit-taking. On Friday there was another turning point and an upward trend was again started. Bargain hunters provided the impetus for this. This was followed up by the agreement that Russia managed to reach with China.

Russian wheat again allowed into China

Russian President Vladimir Putin has secured a great opportunity for the Russian grain sector with his visit to the Olympic Games. From now on, wheat and barley can again be delivered to China from all over Russia. This was only reserved for some regions due to China’s fears of certain fungi in the grain.

Russia/China deal impacts other markets

There is talk of a breakthrough in trading circles. The new agreement offers Russia the opportunity to export large quantities to China via the Black Sea. This will be at the expense of sales from Europe, Australia and Canada to China.

Decline Chicago and Paris

In Chicago, wheat prices fell by almost 3% in the past week to about € 245 per ton. In Paris, the sellers had to give up some more. Due to a strengthening euro against the dollar, the price had to come down a bit more. This ultimately resulted in a price reduction of almost 5% on the futures market in Paris.

The wheat price ended the week in Paris on Friday afternoon, February 4, at €265.50 per tonne. The recovery on Friday continued on Monday 7 February. At the beginning of the afternoon, the first contract to expire (March 2022) rose to € 268, or € 2.50 in the plus compared to Friday. Also in Chicago on Monday, February 7, at the start of trading, more than 1% on Friday’s price.