The wheat price is expected to remain stable at the current high level until the end of this year. So says Seth Meyer, chairman of the influential World Agricultural Outlook Board (WAOB). After that, the wheat price will probably gradually decline again.
The fact that the wheat price will fall from 2019 has to do with expectations of a larger wheat area for next season. Current prices are supported for the time being because exports from Russia are likely to decrease.
Russia's exports are still the topic of discussion on the wheat market. Last year's record yields (85 million tons) will not be achieved in the country. It is expected that approximately 70 million tons will be harvested. Yet Russia is exporting wheat at a rapid pace.
US takes over exports from Russia
While there are very good yields in South America. Exports from the US are expected to increase from 24,5 million tons to 27,9 million tons. Meyer therefore expects that wheat from Russia will gradually be priced out of the export markets.
For the time being, however, the situation is still that Russian wheat is very cheap. In fact, Brazil reported purchasing Russian wheat for the first time since 2010. The wheat quotation on the Matif in Paris has fallen to €202 per tonne in the past week.
Falling corn price
The corn market is currently mainly influenced by an excellent Ukrainian harvest. The corn price fell to €170,5 per tonne on the Matif. A supporting factor is the heavy rainfall in the US, which hampered the harvest.
The price of soybeans is showing an upturn and hovering around $325 per tonne. However, the price is under pressure worldwide, because no less than 369,5 million tons of soy will be produced in 2018/2019, a world record. The WAOB expects that despite the tariffs on US soybeans, China will still buy US soybeans because Brazil and other sources simply cannot meet demand in China.