Wheat prices fell in the past week. Wheat quotes on the CBoT hit their lowest level in 6 weeks. What did grain prices do in week 43?
Not only was a low level reached at $179 per tonne on the CBoT, the wheat quotation on the Matif also closed slightly below the limit of €200 per tonne. The fact that the CBoT reached the lowest level is mainly because exports from the US do not want to flow smoothly. This is identical to the situation in Europe, while in Europe a lot of wheat is also imported from the Black Sea region.
IGC forecast
Also the forecasts of the International Grains Council (IGC) are a price depressing factor for the wheat market. The most recent publication showed an increase in world wheat production for the 2018/2019 season from 717 to 729 million tons. The institute expects an expansion of the wheat area.
The estimates of the current harvest were also increased for Russia and Ukraine, among others. Exports from Russia are expected to reach 40 million tons rather than the 30 to 35 million tons previously expected.
Corn prices remain under pressure
Corn yields in 2018/2019 are expected to be the second highest ever, the IGC expects. The yields are slightly lower for this season, but the yields are still very good, especially in the US and South America, but also in Ukraine.
At the same time, there is less corn consumption because ethanol production is at a low level. Corn prices therefore remain at a stable low level. Capturing can be wise, especially in view of the high wheat prices.
Record soy harvest
The soy quotation on the CBoT is under pressure due to the upcoming harvest in the US. The forecasts for soy yields in South America also continue to improve. Global soy yields will be record high and are forecast to increase by 9% compared to 2017/2018 according to the IGC. This brings the total production to almost 370 million tons. In addition, the Chinese import tax of 25% on soy from the US causes a accumulation of soy in the US, putting pressure on the Chicago listing.