The price increase for wheat at the end of March was short-lived. After last week’s upward price movement, the EU feed wheat quotation on the Rotterdam grain exchange is falling.
For EU feed wheat, April 4 was quoted at €261 per ton (-€8). This means that the quotation is 34% lower than a year earlier. The quotation is still 17% higher than in the same period of the 2020-21 season.
Wheat prices are under pressure, partly because there is sufficient old harvest available in Europe. The prospects for the new harvest are also favourable so far. On the physical market, trading with this minor mood is very quiet.
Also not helping the European market is that at the end of March Russian wheat prices were at their lowest level since November 2019. The low price level is partly due to the large wheat supply, partly due to the Russian record harvest. In addition, the demand from Russian exporters is moderate, according to the Russian agricultural consultancy Sovecon.
Rosstat, the Russian bureau of statistics, estimates wheat stocks on March 1 at 17.4 million tons. Russian wheat stocks are more than 80% larger than the 5-year average. The weaker exports translate into outstanding sales standing at 2.1 million tons of wheat as of April 3, according to the National Commodity Exchange. A week earlier that was still 2.5 million tons. Exporters were probably waiting for even lower prices in the short term.
The low price level of Russian wheat makes it more difficult to sell wheat on the world market. In addition, the value of the euro against the US dollar has risen this week. A stronger euro makes it less interesting to sell European grain on the world market. On the other hand, the import of goods, such as corn, becomes cheaper.
Corn quotations remained stable until the end of March, partly due to demand from China. Meanwhile, weather conditions have improved in the United States, which means that spring work is also slowly starting. Corn prices responded this week with lower prices on the Chicago futures market, both in the short and longer term.