The wheat market has started the month of April with a downward movement. On Wednesday, April 1, both the CBoT in Chicago and the Matif in Paris saw a sharply lower closing price. The prices are also red the next day.
With that, the turbulence on the grain market for the time being. At the beginning of the week the Matif closed at €196,25 per tonne, but yesterday the closing price did not go beyond €193,50. The CBoT also fell sharply to $202 per ton, compared to $213 a week ago.
Stronger dollar
The decline in wheat prices in the United States marked the largest decline in more than 7 months. Fear of the coronavirus and the economic consequences is one of the causes. US President Donald Trump announced at the beginning of the week that the emergency measures to combat the spread of the virus have been extended until the end of April. A stronger US dollar, and therefore the less favorable export position, is also putting pressure on the wheat price.
The increasing demand for grain products, as a result of the coronavirus outbreak, is not yet structurally reflected in wheat quotations. Uncertainty changes sentiment every day. Market analysts call the recent downward movement in the market surprising, now that wheat consumption is good. The question is therefore asked whether stocks have now been replenished, causing demand to stagnate.
Market tension
Now that spring has arrived on continental Europe, grain crops are in better shape after a mild winter, and arable farmers have finally been able to sow summer grain. This also removes tension. Recent figures from the International Grains Council (IGC) show a larger global grain harvest for the 2020-21 crop year.