Cereal prices on the rise due to drought

The situation on the European continent is closely monitored by the international grain market. And it is not only the situation in the region around the Black Sea that is a cause for concern. This is because now also the wheat harvest has started in Western Europe and the drought (particularly in Germany) appears to be causing significant yield reductions.

In addition, the cereal acreage in the European Union is at an all-time low (-4,1% compared to the 5-year average). Wheat prices are also on the rise again; for example, the wheat quotation on the Matif in Paris rose in 1 week by almost €10 to €187 per tonne.

corn production
Quotations for maize and soybeans rose last week, mainly due to lower yield expectations in the United States (US). This has everything to do with the dry weather in the current critical pollination phase of the maize. However, it should be noted that the current crop conditions are described as better than last year. Also in Europe there are to care on the maize (and its yields), as a result of which the maize quotation on the Matif rose towards €171 per tonne.

The trade war still plays a role in the soybean market. Analysts expect China to continue to buy soybeans from Brazil, partly as a result of the import duties. This while the rest of the world buys the cheaper beans from the US (these are $60 cheaper). In addition, transport from the US is cheaper than from Brazil. It remains to be seen how long China can keep this up.

Russia seizes its chance
According to several analysts, traders in the Black Sea region are ready to sell extra wheat, corn and soy to China and the European Union. This is to fill the gap left by the trade war.Wheat prices have been on an upward trend for some time now.