Wheat and maize prices on the Matif in Paris show an upward trend. Wheat prices are also rising on the CBoT in Chicago. What is the basis for this?
The expectation that wheat exports from the United States (US) will improve plays a major role in the CBoT. As a result, the price reached the highest level in 5 weeks ($193 per tonne). The Matif closed on January 23 at €205,75 per tonne.
The reason for the improved export expectations is that supplies in Russia and Ukraine are shrinking faster, making Russian wheat more expensive. The wheat price in Russia has even reached the highest level in 4 years. Wheat from the US and European Union (EU) will therefore have more opportunities. There is also more demand from African countries.
Sufficient snow cover
Although it is quite cold elsewhere in Europe, just like in the Netherlands, this is expected to have only minor consequences for the crops. This is because the snow cover is generally (more than) sufficient.
Soy prices are rising mainly because the Brazilian harvest is estimated to be lower, which is due to drought in the country. This also affects the corn price, although a lot of corn still comes from Ukraine. Also the continuation of the trade talks between China and the US support corn and soy prices.
Change in US acreage
Various analysts expect the American wheat and corn acreage to increase. This will then be at the expense of the soy area. This can be easily explained, because the country is struggling with large soy reserves due to the trade war between China and the US.