While the Western world was bargain hunting on Black Friday, the opposite is true in the grain market. The American and European stock exchanges also recorded higher wheat prices on Monday 2 December. This is also the case in Russia. Is a further increase plausible?
At the Matif in Paris alley the price of the December contract on Friday afternoon to €185,50 per tonne. On Tuesday afternoon (15:30 PM) the contract is again in the plus, at €186,75 per tonne. This makes it trade slightly higher even than the March contract. The price of the May contract is €187 per tonne. Due to strong premiums in France on the physical market (but also in Germany), the market is rising. Sellers are reluctant due to poor weather conditions for sowing and growth.
Highest wheat price in 5 months
The CBoT missed a trading day on Thursday, November 28, due to Thanksgiving in the United States. On the day off that followed, only 3,5 hours of trading took place, which meant there was a lot of action on the trading floor. On Monday, the signs in Chicago will also turn green again. The wheat price is at the highest level in 5 months.
The price of wheat is also on the rise on the physical markets. In Rotterdam, a ton of feed wheat costs €189,50, which means an increase of €2,50 compared to the previous week. This level was reached for the last time at the end of June with the old harvest. The regional exchanges quote feed wheat between €162,50 and €176 per tonne ex-yard.
Wheat prices in Russia
Rising wheat (and barley) prices are also noticeable in Russia. For the third week in a row, more is paid for grain. Both the export and domestic markets are in demand and arable farmers are starting to carefully sell their stocks before the new year. A ton of baking wheat now pays $210,50. Converted to €190,60 FOB.
All winter grains are sown in Russia, on an area of 18,2 million hectares. A year earlier this was still 17,6 million hectares. Analysts were increasingly concerned about the dry weather in Russia and Ukraine. Significant rain has now fallen, with more on the way, making this less of a risk factor.
Exports continue to falter
Because grain growers in Russia have started the season cautiously, the country's exports are 15% below the level of last season, with 20,3 million tons of grain exported, of which 17,8 million tons of wheat (since July 1). The Russian market agency SovEcon expects that more than 1 million tons less grain was exported in November compared to the previous month (3 million versus 4,05 million tons).
In its latest update, the European Commission slightly revised EU wheat production downwards for 2019-2020, from 146,8 to 147 million tonnes. This is still 14% more than last season. An export level of 26 million tons remains unchanged.