Wheat prices on the Paris futures market are rising again as geopolitical unrest shakes commodity markets. In Chicago, prices fell slightly on Tuesday after Monday's large price swings. Read more about the development of the international wheat market.
The war in Iran and the blockade of the Strait of Hormuz have caused a turbulent shift in oil prices. And in the shadows, the wheat market is also benefiting.
In a highly volatile market, futures markets are currently experiencing greater fluctuations than we've become accustomed to in recent times. While the wheat market in Paris had long hovered around €190 per tonne, we're currently seeing prices of around €207 per tonne. Prices have risen sharply in just three weeks.
This picture isn't yet reflected in the chart below. The chart is still based on the price development of the last March contracts traded on Tuesday.
In Chicago, we saw a similar trend as in Paris. This was exacerbated by a strengthening dollar, which pushed prices up slightly more in euro terms. At the dollar's lowest point – at the end of January – wheat in Chicago was trading for barely more than €160 per ton.
Prices have since risen to close to €190 per tonne. On Monday, the turbulent oil market briefly touched a level just above €200 per tonne. On Tuesday, the market fell back slightly.
At its peak on Monday, wheat prices in Chicago soared to $6,41¾ per bushel. By the end of the day, the price had remained just above $6 per bushel. On Tuesday, the market closed slightly lower at $5,91 per bushel for the May contract.
The publication of the new Wasde report from the US Department of Agriculture had little impact on this. The wheat findings held no surprises for the trade, so there was little to no reaction to them.
The United States figures remained exactly the same as the previous publication in February. This meant that the trade sector paid little attention to this report. Globally, too, there were hardly any changes to the forecasts. The estimate for the closing stocks in June of this year has been revised slightly downwards, but remains the highest in five years.
Local price changes too
Locally, prices are also fluctuating more sharply. The fluctuations are less pronounced than on the futures market, but the influence of the unrest in the Middle East is very noticeable. The Grain Exchange in Groningen raised its wheat price this week by €2 to €193 per tonne. Feed barley also rose slightly and is now trading at par with wheat, also at €193 per tonne.