Low temperatures forecast for later this week in the US are currently supporting the wheat market. Also, according to analysts, the condition of the winter wheat for the upcoming harvest in America is a concern. In the EU, criticism of measures that help Ukraine export grain is growing. These do not turn out as intended and have a serious market-disrupting effect, say six EU member states.
The March wheat contract closed yesterday on the Matif at €287,50 per tonne. That is €1,59 higher than the closing price before the weekend. On the CBoT, wheat prices slowly but surely climbed to the highest level in four weeks. The March wheat contract on the Chicago exchange closed at $7.52½ per bushel. Corn prices moved mostly sideways, closing 0,1% higher at $6.83¾ per bushel. Soy was on the rise and closed 1,7% higher than before the weekend.
Cold weather forecast for later this week in the US boosted wheat prices. Furthermore, the American export figures also gave the wheat price a boost. Last week, 445.000 tons of wheat were exported by the US, which was at the high end of trade expectations. In total, the US has exported 13,2 million tons of wheat so far this season. Exports are therefore 2,9% behind last season. The USDA also released figures yesterday on the condition of winter wheat in the important growing regions. 59% percent of US wheat acreage is in drought. A month ago it was still 69% of the area. In Kansas, 21% of the winter wheat area is in good or excellent condition. That was 19% in December. The condition also improved in Nebraska and South Dakota. In Oklahoma, the condition of winter wheat has deteriorated sharply. This month, 17% of the area received a good or excellent rating, while in December this was still 38%. In Colorado and Montana, wheat conditions also deteriorated.
Competition
In the EU, six Member States submitted a request yesterday (Monday, January 30) during the meeting of European Agriculture Ministers to take measures against the influx of cheap wheat from Ukraine. Poland, Romania, Hungary, Bulgaria, Slovakia and the Czech Republic argue that the import of cheap wheat from Ukraine - which also does not meet European quality standards - is disrupting the local market. Due to the war in Ukraine, grain exports from the country are difficult and the EU has come to Ukraine's aid by, among other things, lifting import duties for a year.
The six member states emphasize that they are not against aid to Ukraine, but draw attention to the consequences that the measures have on the internal European market. They argue that work should be done to ensure the transit of Ukrainian grain to its final destinations, mainly countries in Africa. The six states not only demand a new instrument - a safety net linked to cheap grain from Ukraine - but also want the return of coupled support, which has been abolished in the new common agricultural policy. Furthermore, the countries call for the strengthening of solidarity corridors so that Ukrainian products reach their final destination and the EU is used only as a transit area.
Intervened too late
In India, the wheat price on the local market fell by 13% yesterday to approximately €320 per tonne after the records that were broken last week. The reason for this is that the government has put 3 million tons of wheat from the intervention stock on the market. According to several traders, the Indian government waited a very long time before putting the intervention stock on the market. The intervention stock has already been more than halved in the past year due to the unrest on the grain market caused by the war in Ukraine. The intervention stock will have to be further replenished next spring and summer, some experts say. According to some analysts, the big question is whether and when the wheat price will fall below the threshold value.