It is mainly the weather conditions that affect the market worldwide, for example the extreme winter weather in the United States (US) and the lack of this in Eastern Europe. Could this move the prices?
Figures from the Russian Ministry of Agriculture show that the country harvested 2017 million tons of wheat (net) in the 2018/85,8 season. That is a record, which means that the country has to export a lot of wheat. The ministry arrives at an export figure of 35,3 million tons. That is an increase of 500.000 tons compared to the previous forecast and an increase of 31% on last season.
Russia is therefore a major global player when it comes to wheat exports. The weak ruble, against the euro, helps the country's export position. In addition, subsidies are granted on transport, in order to keep rising transport costs manageable. This makes Russian wheat the cheapest in the world.
Snow and frost
Prices on the world market have stabilized. There are reasons for this, especially in the US and Canada. Record low temperatures were measured, sometimes combined with lots of snow. The logistics network has been disrupted as a result (frozen waterways and rail and road connections are unusable). In regions where insufficient snow fell, the extreme cold damages crops. The dollar has weakened in recent days, causing grain prices to end slightly higher.
Winter grains are in better condition in Ukraine. The autumn was relatively warm and there was sufficient moisture for favorable development of the crops. There is hardly any snow cover in the country. If there is still severe frost, the crops are at great risk. However, it remains remarkably mild in Central and Eastern Europe.
Rain
There is hardly any winter in Western Europe. The heavy amount of rain has delayed or even made crop development impossible. Much winter wheat still needs to be sown. The question remains when this will be possible.
The choice for summer grain is the most obvious, although it seems that the supply of seed is on the tight side. Especially in the Northern Netherlands, many plots are still uncultivated and in some cases not even harvested. New certification figures from the NAK show that 4,5% less winter wheat has been certified and 82% less spring wheat has been certified. This concerns 628 and 144 tons of seed.
Less exports
Between December 6 and 12, 385.635 tons of grain were exported from the European Union (EU). This concerns more than 259.000 tons of soft wheat. In addition, 206.723 tons were imported, mainly corn: 160.410 tons. According to the customs system, this makes the EU a net exporter of 4,9 million tons of grain. That was 11,1 million tons in the same period last year.
The European Commission has announced its intention to add more ethanol (based on grain and sugar) to fossil fuels, up to 14% by 2030. The European Parliament has yet to consider the issue. Environmental organizations and food manufacturers see no point in the plan. About 4,4% of European grain is processed into ethanol. An additional advantage is that the by-product DDGS is a good alternative to GMO soybeans and other imported protein sources.