Wheat prices took a step up last trading session after the market's ticking earlier this week. Partly it is bargain hunters who are getting back in, but the uncertainty about the 2023 harvest is also increasing a bit. A top yield in Australia does not change that for the time being.
The March wheat contract rose €2,75 on the Matif yesterday to close at €301,75 per tonne. On the CBoT, wheat closed 0,2% higher at $7.46¾ per bushel. Corn and soy closed 0,2% and 1% lower respectively on the Chicago stock exchange.
The relatively large supply of good wheat from the Black Sea region had a strong impact on the mood among traders and speculators at the beginning of this week. Both European and American wheat prices were under pressure due to this fierce competition on the world market. There are also concerns about the growth in demand for raw materials in a broad sense due to disappointing economic growth. This effect is also reflected in, for example, the prices on the stock exchanges.
Weird jumps
That mood has now changed somewhat. Concerns about competition and possible lower demand remain, but now that wheat prices have fallen to their lowest point in weeks, bargain hunters are waking up again. And the prospects for the slightly longer term are not bad, according to some analysts. Wheat in the US is in moderate to poor condition and the USDA has not yet made an adjustment for the extreme cold at the end of December. The wheat in Russia has certainly not survived the winter unscathed. A combination of a relatively tight final stock and a moderate harvest forecast could cause the market to make strange jumps this spring or at the beginning of the summer.
The large wheat harvest in Australia appears to have little influence on price developments in Europe for the time being. The wheat harvest that is coming to an end in Australia is likely to amount to a record quantity of 42 million tonnes. Reuters writes this based on information from traders and analysts. “We're getting monster returns,” Phin Ziebell, agribusiness economist at National Australia Bank, told Reuters. “Western Australia performed very well.” The harvest for Western Australia is estimated at 16 million tonnes, compared to 13 million tonnes in previous crop forecasts. It is urgent to get a place in the Australian ports and to get grain shipped. The months of March and April are already almost full. Rain late in the growing season has ensured the top yields. The disadvantage of moisture around the grain setting is that the protein content and therefore the quality is compromised. Part of the baking wheat that is at the lower end of the specifications probably disappears into animal feed.