Getting used to: wheat market without major outliers

The March wheat contract on the Matif closed above €9 per tonne again at €400 per tonne in the early evening (Wednesday, March 403,50), an increase of 2,2% compared to the closing price on Tuesday. The May contract closed a quarter higher at €370,25 per tonne. The contracts for the new harvest have lost some weight compared to yesterday. The September contract fell 2,6% to close at €311,25 per tonne. This will gradually decrease during the season to €290,75 per tonne for the May 2023 contract. That is a decrease of 2,3% compared to yesterday.

Corn contracts have also remained quite stable. The June contract rose 0,6% to 347,75 per tonne. The price movements for the other contracts were also less than 1% compared to the previous closing price. Only the first contract for the new harvest had to lose more, namely 2,2% to €266 per tonne.

Look up
Some analysts are mainly looking upwards at the top that the grains market can reach. Equally interesting is where the bottom of the market may reach in the coming season. That's where the contracts being traded for 2023 may offer some guidance. Quotations for the 2023 harvest have been steadily increasing since January. This has accelerated somewhat in the last two weeks due to the war in Ukraine. A price for the contracts for the 2023 harvest between €240 and €250 seems realistic for the longer term, according to some analysts. This also partly places a floor in the market for the 2022 harvest.

Growers are almost euphoric now that €300 per tonne is being paid in the physical market for wheat from the coming harvest behind the combine. But the wheat market is very volatile and last week it turned out that €400 per tonne is not impossible on the physical market either. A difficult choice for the grower. Do I now do business at €300 - a price that no one expected three weeks ago, or do I remain calm and stick to the familiar sales strategy, in the expectation that there is more room up than down?