Inside Potatoes
Cash settlement is on a string
The cash settlement has been hanging on a string in recent weeks that moves just at or above €31. The provisional highest quotation was reached on February 7, but in the following weeks it fell further and further.
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Choose the subscription that suits youThe above means that in the last few weeks little changed is in physical trading, and is therefore still stable. The futures market, on the other hand, reacted quite strongly and went from €32,90 (closing price of week 6) to €29,60 (3 weeks later).
This shows that, at a (very) high level of €30, the fear of the market imploding to, for example, €25 is (very) high. Due to the stable nature of the physical market normalizes the futures market for the April 2019 contract has also recovered somewhat. The final score will be €7 on Thursday, March 31,10.
Physical market is leading
Ultimately, the physical market will determine the further development of the potato futures market. There will probably not be much premium (difference between the cash settlement and the futures market) anymore. Can the cash settlement, and thus the potato futures market, be raised to a higher price level?
If we look at the contribution from Germany (just under €30) versus that from the Netherlands, France and Belgium (average €31,40), a higher cash settlement should be possible in the coming weeks. The German contribution will then have to rise to an equivalent level compared to the other countries.
Exciting weeks
One way or another, it will remain exciting in the coming weeks in this already historic price season, in terms of price development. A tour of the fields shows us that most stakeholders assume that the April 2019 quotation will settle above the €30 level. That would be a settlement price unprecedented in this century.
