While combines are running at full throttle to bring in the wheat crop, the price of wheat continues to rise. Not only is the price of wheat rising, but the price of corn is also rising.
Wheat and corn prices fell somewhat at the beginning of the week, but managed to rise again on Wednesday, July 25. The Matif in Paris traded above €200 per tonne and continued this price increase on Thursday, July 26 (to €203 per tonne). These prices are also off country paid.
An important reason for the price increase is that analyst firm Stratégie Grains estimates the European soft wheat harvest to be below 130 million tons, while around 2017 million tons were harvested in 141,8. The yields are disappointing, especially in Germany. The wheat quotation in London also reached a 5-year high.
Reductions in wheat yields
The International Grains Council (IGC) also lowered the forecast for European wheat yields. Combined with lower wheat yields in Russia, the global wheat yield amounts to 721 million tons. This while 758 million tons were collected last season.
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The price for corn followed the price of wheat and closed on Wednesday, July 25, at €175,75 per tonne. This is mainly due to concerns about the condition of the crops. In addition, revenues in France, Germany and the Netherlands were disappointing. Prices are also rising on international markets, but the increase is tempered by the good condition of the crops in the country United States (US) and Canada.
Soy price recovery
The soy price is recovering. This after a long decline in prices, as a result of the conflict between the US and China. From one report of the IGC it appears that global yields are slightly higher, but consumption is also increasing. That means global inventories are likely to fall by 11%. This is an important 'bull factor' for the soy price.
In addition, the European Union and the US signed an agreement last week, the aim of which is to remove trade tariffs. The Union is also going for billions of soy from the US buy.