The Matif also recorded a higher wheat price on Monday 6 July. Now that the harvest has started in Russia, the harvest appears to be disappointing in many places. Together with a smaller corn crop in the US, this offers an opening for wheat prices.
This spring, Russian wheat exports were curbed when the government introduced a quota system. The ministry has announced that it will also work with export quotas for next season. Exports are free in the period July-December, but after that it regulates the amount of wheat that exporters can export. This should keep the domestic market manageable and prevent food prices from suddenly rising, as was the case this year.
Quotation of Russian exports remains
In October, when more can be said about the harvest size, more will be known about the quotation system. The Russian Agriculture Ministry expects to be able to export 45 million tons of grains this year, of which 35 million tons of wheat. The new export season started on July 1. Rain this week means that the combines cannot drive everywhere in the south of Russia. The first figures from the field indicate a disappointing yield. This puts price formation on a firmer footing. For example, the influential analyst firm SovEcon lowered their forecast. Government figures report wheat yields that are a quarter lower than last year. Barley yields are about 15% lower.
After a shortened trading week in the US, resulting in heavy price increases, the CBoT is turning red again today. Spring wheat in the US is in good shape according to government figures. However, exports are at a higher level than expected. The news that 2 million hectares less grain maize has been sown than previously thought has a greater impact. This eases the situation on the feed grain market, from which wheat can also benefit. Wheat acreage drops 2% in the US.
Weather influences position of feed grains
While wheat prices in Europe are experiencing a slight recovery, they are under some pressure in Russia. However, there remains a solid foundation for the grain market. In Europe, the wheat harvest has yet to start and arable farmers are mainly concerned with barley and rapeseed. Showers sometimes throw a spanner in the works. A long drought period is expected to have had an effect on yields, although this is less discussed now. Analysts are talking about drought in the US, where corn has reached a crucial growth phase. Persistently high temperatures and little precipitation have a negative effect on the flask filling. This indirectly supports feed wheat prices, when less corn is expected.