Week 13: weather affects grain market

The wheat quotation on the Matif in Paris has been fairly stable since week 11 and was supported by the late spring. However, the wheat futures quotation on the Matif (delivery in May) fell last week by €1,75 to €163,25 per tonne. The quotation for September was a minus of €2,25 to €167,50 per tonne.

(Text continues below the chart)The wheat quotation has mainly moved sideways in recent weeks.

The International Grains Council (IGC) expects the total wheat harvest in the period from 2018 to 2019 to reach 741 million tons. That is a decrease of 17 million tons, compared to previous expectations. However, the wheat market does not seem to respond immediately to this.

Good condition
The Russian winter grains are in good condition; only 3% to 5% of the area would (according to analysts) be in poor condition. This probably means that Russia will once again play an important role as a global grain supplier. The Russian Ministry of Agriculture expects grain exports of 52 million tons, of which 37 million tons will be wheat. It is an increase of about 40%.

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Egypt buys a lot of Russian wheat. For example, it was announced on Thursday, March 29, that GASC (Egypt's main importing agency) has purchased 240.000 tons of wheat from Russia (delivery April/May). This for a price of $233,71 per tonne (converted €208 per tonne).

Significantly fewer EU exports
In the period from 14 to 20 March 2018, Europe exported approximately 476.814 tonnes of grain, of which 204.833 tonnes consisted of soft wheat. In the same period, 497.387 tons of grain were imported, of which 97.800 tons were wheat.

This makes the European Union (EU) a net exporter of 2017 million tons of grain in the 2018/5,2 season, based on data from the customs system. However, this is considerably less than was exported in the same period last season (15,4 million tons).