Continued dry and warm weather has caused the futures market to move again this week. Now the question is to what extent the futures market could rise and what is realistic. Asking the question is easier than answering it. Even in the driest areas of the EU-4, stories and expectations differ.
The April 2023 futures market quote has risen sharply over the past week. Was there still trading on Friday 29 July at € 23,50, exactly one week later that is around € 28. If this trend continues, the $30 barrier could be broken in the coming week. However, that is not yet the case. To keep the wind in the sails, it has to keep blowing, in other words: no significant rain and temperatures of 28 degrees plus. If the current weather type continues, the potato crops in areas where growers are already concerned about the vitality of the crop will wear even harder and this will affect the yield to be harvested. A shower of 5 or 10 millimeters, such as has fallen locally in recent days, does not help.
A similar picture was seen in the 2018 harvest, when the April contract rose from €20 to €30 in a very short time. The increase this season is more gradual. After all, the potato crops developed well in the months from planting to June. This can still be seen in the trial harvesting results, but the next few weeks are expected to show a different picture (read: significantly less results!).
Weather forecast makes the market
In view of the Belgapom quotation (€25, an increase of €5), the physical market is making a significant jump. In that sense, the futures market (about €27,50 around noon on Friday, August 5) is not even that high. After the weekend, the weather and then the somewhat longer-term forecast will determine the direction of the futures market. Is the jump towards €30 made (dry and warm weather for the long term) or is a weather reversal reported. In the latter case (precipitation), the market will fall again. At what price level is always difficult to indicate.
That price range for next season will certainly not have to fall far back below the €25 level, there seems to be too much going on for that. What that will become at the top of the market is also a question of coffee grounds. In the 2018/2019 season, €35 proved to be a bridge too far and the market moved around the €30 level throughout the season. It is interesting to see what the upside could be this season with a higher cost price and the current high inflation.