The wheat listing on the CBoT in Chicago continues to rise. The price is now at its highest point in 6 years. The reason? Traders expect the demand for grain, corn and soy to remain high. With China as the largest importers, it creates confidence in the market.
On the CBoT, the wheat price rose by $5 on Tuesday, January 0,12. This brings the price to $6,54 per bushel, the highest quotation in 6 years. This means wheat follows corn and soy prices, which earlier this week reached their highest prices since 2014. The wheat price on Matif has also risen and now stands at €217,75 per tonne.
Unrest and uncertainty
Many parts of Latin America are experiencing or have experienced drought this season. That is why one is being introduced in Argentina and parts of Brazil, for example smaller harvest expected. In addition, Argentina has export restrictions on corn in order to safeguard food supplies in our own country. The strikes that have been going on for quite some time are also causing unrest on the market. As a result, traders fear that the country is no longer seen as a reliable trading partner. This can have major consequences for future sales opportunities.
Conditions are not only far from ideal in South America, drought is also prevalent in several American states. As a result, the USDA has downgraded the quality of the wheat. According to traders, the new WASDE report may also have an effect on the price, so a decline is not yet expected.
Transport on its way to record
The Canadian railway company CN also reports that a transport record has been set for the tenth month in a row. In the 2020/2021 season, 14,5 million tons of grain have already been transported until December. That is 15% above the level of the previous record. This increase is partly due to investments that CN has made, but it also indicates that there is currently a lot of (international) trade.