Week 9: cold dominates wheat market

The cold weather caused the most movements in grain prices in the recent period. The Matif in Paris reached its highest price (€26 per tonne) on February 164,50, a level not reached since October last year. However, the consequences of the cold for European winter crops appear to be less than expected, due to the insulating effect of the snow.

The CBoT in Chicago also closed on February 27 at more than $170 per tonne. However, this was not due to the cold, but to drought. Kansas and Oklahoma, counties that produce a lot of winter wheat, experienced lower qualifications for wheat conditions. Rabobank expects wheat prices to continue to rise in the near future.

(Text continues below the chart)Wheat prices on the Matif and CBoT are showing a strong increase.

Export in European Union
Despite the fact that wheat production this season is 3,3% higher than last year, European wheat exports are very low this year. The European Union (EU) is a net exporter of 2017 million tons of grain in the 2018/5,5 season, compared to 13,2 million tons last season. This is partly due to the supply of cheap wheat from Russia.

The first forecast of European wheat production for the coming season is 304 million tons, slightly less than last year.

Global wheat supplies
Recent figures from the International Grains Council (IGC) show that global wheat supplies are at a record level of 254 million tonnes, which is 14 million tonnes more than last year. However, for the first time in 6 years, it is expected that there will be a decrease next year. The European wheat stock currently amounts to 13 million tons.

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Situation in the Netherlands
The wet autumn of 2017 resulted in approximately 5% less winter wheat being sown in the Netherlands. However, the current cold weather conditions are being used to sow summer grain.