The wheat market continues last week's trend, with prices rising on both the Matif and CBoT today (Monday). Concerns about drought and the ongoing war in Ukraine continue to grip the market. The prices of maize and soya, on the other hand, are under some pressure.
The wheat market is a real weather market during this period. The May contract today reached a high of €413,75 per tonne. The first contract for the 2022 harvest (September) also broke the €400 barrier and rose to €405 per tonne. While writing this article, prices have fallen slightly, but the wheat contracts on the Matif are still up compared to last week. Prices on the CboT are slightly less on the rise, but at the time of writing this article most contracts are at a plus of approximately 0,6% compared to the closing price last Friday.
Drought on the southern prairies in the United States - where most winter wheat is grown - has been a problem for some time. Due to high temperatures, low humidity and strong winds, the US Meteorological Service today issued a wildfire risk warning in the area. According to the service, the current weather conditions are actually consistent with July or August. The wind and very dry air will cause a persistent fire risk from Monday. Drought also determines the mood on the grain market in Europe. The drought here is not yet as extreme as in the US. With the warm and dry period expected over the next ten days, concerns are also increasing here and this is reflected in the Matif.
Corn and soy under pressure
In the corn and soy markets, weather reports are actually causing prices to fall. Prices on the CBoT for the various corn and soy contracts are between 0,8% and 1,4% lower compared to the closing prices of the previous trading session. Warmer weather is expected in the corn belt, helping farmers to finally make progress with sowing corn and soy. So far, this work is lagging behind last year due to cold and wet weather in the main growing areas. Tonight the USDA will release the weekly Crop Progress report. That report has had a clear influence on price developments on the futures market in recent weeks. The price of soya came under further pressure due to slightly lower imports from China. According to data from customs authorities, the world's largest soy importer imported 28,36 million tons in the first four months of this year. That is 0,8% less compared to the same period last year.