The quotations of wheat, maize and soy are again on the rise on the international stock exchanges. After a week of mainly falling prices, bargain hunters are being drawn back to the market. In addition, negotiators are also concerned that the Black Sea area will remain off the market for a longer period of time.
On the Matif, the May wheat contract closed yesterday at €376,75 per tonne. That is €15 above the closing price before the weekend. The first contract for the new harvest (September) rose even faster by €18 to €341 per tonne. The price for wheat of the 2022 crop year will gradually decrease to €317 per tonne for the May 2023 contract. The wheat quotation also improved on the CBoT. The May contract closed last night at $1.119,25 per bushel (approximately €374 per tonne). That is an increase of 5% compared to Friday. For the new harvest, wheat contracts on the CBoT increased by approximately 4,5%. Corn, rapeseed and soy were also on the rise. Corn rose by 2% on the CBoT, soy 1% and on the Matif plus rapeseed more than 3%.
As one of the reasons for the rising prices, analysts point to increasing concerns about problems with the export of wheat from the Black Sea region. Last week, analysts and traders saw several signs that a near-term truce was a possibility. That optimism is disappearing more and more. Market agency APK-Inform announced yesterday that it expects 200.000 tons of wheat to be exported by Ukraine in the period from March to July. To date, 18,1 million tons of wheat have been exported, which is 32% more compared to the same period last year.
Capacity problem
According to APK-Inform, 99% of wheat is exported via the port on the Black Sea. Work is now underway to convert this to rail transport to the border with the EU. This requires the necessary adjustments. The capacity of rail transshipment facilities is small compared to logistics in the ports. In addition, the railway is extensively used for passenger transport and the transport of humanitarian goods. Due to the commotion, not all routes can be used.
The ending stock of wheat is estimated at 5,9 million tons; 2,8 times as much as last year. However, according to APK-Inform, part of the stock must be considered lost due to the fact that the stock is partly stored in areas where there is currently heavy fighting.
What also plays a role in the revival on the grain market is that last week the quotations fell relatively sharply. That attracts the interest of speculators. The chance that the price will fall further is considered relatively small by parties that enter now, while there is still a lot of room at the top. The contracts for the 2023 harvest have been around or well above €250 per tonne since the beginning of this month. That is more or less seen as a floor price for this year's harvest. The top is difficult to estimate according to analysts, but €400 per ton can also be broken on the physical market, as we have seen before.