Week 18: Grain prices skyrocket

The grain market received a boost from the message from FAO (the Food and Agriculture Organization). Global grain stocks are expected to decrease by 20,6 million tons to 735 million tons. 

At the CBoT in Chicago, corn prices rise to the highest level in almost 2 years. The price also moves to one on the Matif in Paris high level (more than €167 per tonne). This has to do with a disappointing harvest in Brazil.

In addition, the International Grains Council (IGC) reported that global corn consumption is increasing, while production is lagging. As a result, stocks are decreasing significantly. In the United States (US), corn sowing is also only half as far as it should be according to the 5-year average.

(Text continues below the chart)The corn quotation on the CBoT is at the highest level in 2 years.

Wheat prices are rising sharply
The wheat price also remains rise sharply. The main reasons for this are the unfavorable weather conditions in the US, Australia and Canada. In the European Union (EU), crops are generally in good shape, only in the Black Sea region there are concerns and the harvest is estimated to be lower.

It is also becoming increasingly clear that almost everywhere next season yields will not be as high as last season. A new boost for the wheat price was the message from the Food and Agriculture Organization (FAO). Global wheat production is expected to decline by 2018 million tons to 11.3 million tons in 746.6 compared to 2017. 

Tension in the soybean market
Soybean prices are stable, but there is a lot of tension on the market. The talks between the US and China have not yet produced a clear outcome. It is claimed that China has issued an emergency order to grow more soy. This shows that the country no high expectations of the talks with the US. 

The grain price in Europe is also supported by the sharply declining value of the euro against the dollar (currently €1 is approximately $1,20).