Inside Grains & Commodities
Wheat price adds a big shovel on top
Now that the wheat harvest is almost over, it appears that wheat yields in Europe are considerably worse than expected. This results in sharply rising wheat prices. However, the prices for maize and soya show a different picture.
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Choose the subscription that suits youThe wheat price closed at €1 per ton on Wednesday, August 208,50, and rose to €2 per ton on Thursday, August 210,25 (Matif in Paris). The reason for this is that wheat harvest, especially in Germany, is very disappointing. On Wednesday, August 1, it was announced that the hectare yields in the country are around 6 tons per hectare.
Although the yields in the Netherlands and Belgium are excellent, the harvest is disappointing in almost all of Europe. Figures from analyst firm Agritel show that the total harvest in Europe is estimated to be 15 million tons lower compared to last year. It means a reduction of about 10%.
Wheat harvests are also disappointing outside Europe, especially in Russia and Ukraine, but also in Australia. In Australia, the harvest is expected to be 20 million tons, which is 1,2 million lower than last season and more than 33% lower than the 2016/2017 season.
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The wheat price on the Matif in Paris shows a strong upward trend.
Decline in soy prices
De corn price (Matif) has shown an upward trend since week 29. This is due to concerns about drought in Europe and the United States (US). However, on Thursday, August 1, the quotation fell by €7,25 per tonne, following the fall in the soy price.
Although the price of soy rose sharply at the beginning of the week, a decline started on August 1. The price recovery was due to drought in the Midwest, where a lot of soy is grown. Some concerns about trade tensions between the US and China resulted in many contracts being sold, resulting in a declining price.
Lots of soy imports from the US
In July 2018, Europe imported almost 3 times as many soybeans from the US than in July 2017. The share of this product (in all European imports) therefore increased by 28%. The fact that the share of soy from the US is increasing is partly because the price in the US is currently competitive with the US price of soy from Brazil, for example.
In Brazil, the price has risen sharply due to demand from China, which has to do with the trade war between China and the US. Moreover, in discussions with American President Donald Trump, the European Commission promised that they will report every 2 months on the development of soy imports.