The wheat market is on the move. While the year started with record prices, a declining trend has been started in recent weeks on both the Matif and CBoT. This is mainly due to the coronavirus outbreak. But Russia is also contributing.
Barely 2 weeks ago, the wheat quotation on the Matif in Paris reached a record in almost a year. At the highest point, €198,25 per tonne was charged. The price is now fluctuating again around the limit of €190 per tonne. A similar price decline was also seen on the American CBoT in the same period.
High production Russia
The global fear of the coronavirus is causing a negative spiral on the grain market. New figures from Russia add to this. For example, the Institute for Agricultural Market Studies (IKAR) reported this week that Russian wheat production could reach 79,5 million tons this year. That would be more than 5 million tons more than in 2019 when the harvest was already large and the price fell.
According to IKAR, farmers in Russia have sown a record amount of winter wheat this year. This will partly be inspired by Russia's export ambitions. It is also reported that the situation surrounding the soil moisture balance has improved. If severe frost If this does not occur and no new drought occurs in spring and early summer, as was the case in the past two years, the harvest may even be slightly larger.
Falling exports
The total grain harvest in Russia could reach almost 127 million tons, according to experts. Subsequently, market analysts reported this week that exports and export prices of Russian wheat are declining. This after 11 months of growth.
European traders optimistic
The European Commission has not changed its estimates for EU common wheat exports. This therefore remains at 28 million tonnes. The fact that the European wheat price is now falling is also due to the strong euro. It makes European wheat less competitive on world markets.
Nevertheless, there is optimism among many European wheat traders. Germany expects a higher export figure. “The good number of shiploads is expected to continue in February,” a German trader told Reuters. Poland also has a robust export program, although export prices have also fallen here.