Wheat futures prices mainly fell over the past week and the trend seems to be continuing.
December MATIF wheat closed at €424.25/t last Wednesday week and at €414/t by Friday’s close. Markets picked up somewhat on Monday, but closed down again at €404/t on Tuesday’s close.
Futures markets seem increasingly jumpy as we get closer to harvest. Questions are being asked as to the potential impact of high feed prices on demand.
There is also a growing awareness as to the cost and risk of financing a harvest that could be more than double the value of previous years.
A number of background issues acted to weaken prices towards the end of last week.
There was an amount of profit taking by funds, which is normal following significant price spikes.
It is also worth noting that last week’s suggested ban on wheat exports from India seems to have eased somewhat. It now seems that the country will still export up to 1.8Mt of grain which was already at ports.
Another factor which impacted last week was news that the UN is attempting to negotiate sea corridors for the export of Ukrainian grains. This would ease supply concerns and potentially decrease prices.
Elsewhere, there are predictions for a very big Russian wheat crop, with up to 39.0Mt of exports suggested.
While grain growers elsewhere must carry the higher input costs associated with Russian actions, EU producers are again having to compete with unsanctioned Russian exports produced with low internal fertiliser prices.
Elsewhere, US wheat output projections are again lower and maize planting is behind normal for the time of year, with potential yield implications.
A volatile market where buyers do not want to risk buying and sellers are unwilling to sell as prices continue to rise makes it impossible to pin down prices.
Best indications are that nearby prices remain similar to last week, with very little native old crop remaining. Nearby indications suggest €420 to €440/t for wheat (depending on the day and hour). Barley is about €10/t lower.
New-crop wheat price is theoretically in the €420 to €425/t bracket, but wheat offers tend to be back in the €405 to €410/t range.
Barley is around €410 to €415/t, but, again, physical price offers are more in the €380 to €390/t range to enable it to compete with imported maize. Green price offers earlier this week were €350-€355 for wheat for harvest and from €327 to €340/t for barley.