Wheat quotes on the futures markets in Paris and Chicago were under some pressure at the start of the week, but the wheat price has picked up again in the middle of this week. Where is the wheat market headed?
Russia goes protect his grain supply due to rising bread prices in the country (plus 6,3%) and has imposed a levy on grain exports, as became clear last week. Despite the fact that various analysts and governments expect a record harvest for 2021, the price remains fixed with a strong undertone.
Countries would like to maintain their stocks, especially with the various lockdowns in different parts of the world. In addition, China's attractive effect on the world market for various other raw materials ensures a steady mood. Ukraine reports that the growing conditions for the wheat crop in the country, also called the world breadbasket, are excellent. Grain growers are in no hurry to sell their stocks, which means supply is limited.
Compare Arab Spring
De technical analysis March grain futures went from neutral to up yesterday, resulting in additional purchases of funds on the Paris Matif. This makes the grain price absolutely corona-proof.
It is striking that the grain price development in 2020 has many similarities with that of 2010, the year of the Arab Spring (see graph). Something that several countries are concerned about. Now that the corona crisis is hitting many countries, high food prices are the last thing they need. It is clear that there is still a lot of upward potential in the grain price