The wheat market is balancing between ample supply and rising risks due to weather and energy. Buyers remain cautious while price differences and export positions shift. Read more about the development of the wheat market.
The futures market in Paris has rebounded somewhat after a dip last week. On April 21, May wheat on Euronext closed at €195,75 per ton and the September futures contract at €209 per ton. In Chicago, July wheat traded around $6,12 per bushel. This is not a breakout into a structurally higher market, but it is a signal that the market is starting to price in some risk premium again after earlier pressure.
The main driver of wheat at the moment is the weather in the United States. The condition of US winter wheat has deteriorated slightly over the past week. The oil price has also risen this week due to uncertainty surrounding the conflict between the US and Iran.
At the same time, upward headroom for wheat remains limited for the time being because global supply is abundant this season. This is also evident in the trade: buyers are selective, tenders remain limited, and competition between Europe and the Black Sea region is fierce. Buyers are taking a wait-and-see approach and aiming for lower prices once the war in the Middle East is over.
Value of the dollar
The value of the dollar is also important for European wheat. This week, the dollar has strengthened slightly. This works to the advantage of European exporters, as it makes them more competitive on the world market.
The price difference between EU wheat and US wheat has narrowed over the past week due to a rise in Chicago and stabilization in Paris. The May contract for soft red wheat now stands at the equivalent of €189 per ton. This has reduced the difference compared to Paris to approximately €6 per ton. For the new crop, the differences are larger. September is trading at the equivalent of €195 per ton in Chicago, placing it €14 below the level in Paris.
The price difference between the old and new crop on the Paris futures market is also €14 per ton. That difference is larger than usual and is explained by higher production costs, including those for fertilizer and energy.
Local remains stoic
Local wheat quotations are not strongly affected by fluctuations on the world market. Wheat is, however, slightly lower this week than a week ago. Beurs Zuid is lowering by €1,50 to €178 to €183 per ton. The Graanbeurs in Groningen is quoting €191 per ton, €1 lower than last week.
The price of feed barley remains stable this week: €192 per ton in Groningen and €175 to €180 per ton in the south.