Wheat prices have bounced back over the past trading session. News from the southern hemisphere plays an important role in this. The wheat price on the Matif has thus fallen for the third day in a row and is closed at the lowest level in a month and a half.
The September contract on the Matif closed yesterday at €380,50 per tonne. That is €11,75 lower compared to the previous closing price. The other contracts for the 2022 harvest also showed a similar decline on the Matif. The May contract has fallen below €370 per tonne and closed at €369,50 per tonne. That is the lowest quotation since May 3. On the CBoT, wheat prices for the July contract fell 4% to $10.41,25 per bushel (approximately €358 per tonne).
The trend of falling wheat prices was prompted earlier this week by a possible reopening of the Ukrainian port, making it easier for the country to export wheat again. Yesterday the downward spiral gained extra momentum due to reports from Australia and Argentina. Australia is heading for a very good wheat harvest. That would mean a top harvest for the third year in a row. According to the preliminary forecast from market agency IKON Commodities, Australian farmers have sown 14,45 million hectares of wheat. Last year the area was approximately 14 million hectares. Grain prices are relatively high and growing conditions in the country are almost ideal, according to the market agency. So there is every reason for Australian farmers to sow as much wheat as possible. Although the wheat has only just come into the ground, analysts estimate the Australian harvest for this season at 30 to 35 million tonnes. This is just under the record harvest of 36 million tons in the 2021/2022 season. The ten-year average for the wheat harvest stands at 24,8 million tonnes according to data from the Australian Bureau of Statistics Abares. The good yield expectations provide some relief to the tense international grain market.
Record export
Argentina sold $4,2 billion worth of grains and oilseeds in May. The Chamber of the Oil Industry (CIARA) and the Grain Exporters Center (CEC) announced this yesterday. That is the highest export value since these data have been kept. Compared to May 2021, the export value of grains has increased by 33%. In the first five months of this year, the export value amounted to $15,3 billion. According to the CIARA and CEC, grain exports have been significantly influenced by the sharp price movements on the world market, by the export limits imposed by the Argentine government and by the large reserve capacity of soy processors in the country. Grains and oilseeds, including their derivatives, occupy a major position in Argentina's trade balance. Last year, these products accounted for almost half of all exports from the country.
Although quotations on the international stock exchanges were down, high prices are still being paid on the physical (world) market. This was confirmed by the Egyptian state purchasing agency GASC. Yesterday, GASC closed a tender for the delivery of wheat at the end of July. The prices in the table below are in dollars. These are prices well above €400 per tonne.