The wheat price on the CBoT in Chicago has reached its highest level in 10 months. The reason for this is not only the heat wave in the European Union.
Another reason for the wheat price increase is the fact that harvest expectations in Canada have been revised downwards. This is mainly because the actual sown wheat area in Canada is 4,2% lower than previously expected. This has given new support to wheat prices on the CBoT, pushing the price to almost $200 per tonne. The price was still $19 per tonne in week 153.
New problems in Australia
In addition, yield and export expectations have also been lowered in Australia, the world's fourth largest exporter. Export expectations have been reduced by 18% compared to expectations in March. The yield expectation was reduced by more than 11%, mainly due to drought. The country is expected to export approximately 2019 million tons in the 2020/11,7 season.
There are moderate concerns in the European Union about the current heat wave. Particularly in the northern regions of the continent, where wheat is not yet well developed, it could reduce yields. Yet European traders remain calm and still expect a significantly higher yield (compared to last year).
Matif shows increase
Yield expectations also remain good in Russia, although a number of areas there are also seriously affected by drought and heat. The wheat quotation on the Matif in Paris is therefore slowly rising further, although there was a dip at the beginning of this week. The lack of clarity about the situation in the United States continues to play a role in this.