Wheat and corn prices were under pressure both on the cash markets and on the Euronext/Matif and the CBoT in the week just ended. While the meanwhile most traded wheat September contract was still at 243.50 euros/t last Friday, it was 6.75 euros/t less by the closing bell on Thursday (236.75 euros/t). Even today, the prices for wheat tend to be weaker, even if the sell-off of the past few days is less pronounced today. Market participants pay less attention to the fact that the signs of an extension of the grain agreement beyond May 18 are more than certain. First and foremost, the low prices from the Ukraine and also from Russia are putting pressure on the international market development. From Russia in particular, it is said that there are currently increased activities to market the lush last harvest at low prices. According to reports, there are still larger quantities of wheat and corn in the silos in the Ukraine, awaiting acceptance.With the agreement between Poland and Ukraine, the war-torn country once again has a reliable export route open and the inspections of Black Sea transports are running faster than two weeks ago. EU exports eased week-on-week in the latest customs data. A similar picture emerges in the USA. The last export bookings that the USDA was able to publish were below the average of the previous weeks. On the other side of the Atlantic, heavy rainfall in key growing areas in Kansas, Oklahoma and Texas is relieving farmers and putting pressure on prices at the CBoT. The new acreage forecasts for Canada also created a bearish mood. According to data from the statistical office, the area under wheat is likely to be one of the largest in the last 22 years and will increase by a significant 6.2 percent compared to the previous year. In contrast, the USDA expects less wheat in the next harvest for Australia. After the two record harvests this year (39.2 million tons) and the year before last, an Australian harvest of around 29 million tons is expected for the 2023/24 season. As a result, the export potential is also assessed as being 7 million tons lower.For Europe, the European Commission recently corrected the European grain harvest slightly downwards in its April estimate. However, the total grain harvest is expected to be 7.1 percent higher overall. At 130 million tons, the wheat harvest is likely to be around 4 million tons better than in 2022/23. The Commission's analysts are also anticipating a significantly better corn harvest, which is likely to be 12.4 million tonnes higher but still around 10 million tonnes below the long-term average. Corn prices were also under pressure this week as a result of the downward trends in wheat. The EU import volumes are still and have already far exceeded the import level of the previous year. Spain remains Europe's largest importer and in view of the current weather events in the southern European country, little is likely to change that anytime soon. The import list is followed by the Netherlands and Germany. The contracts on the CBoT were recently under pressure due to the rapid sowing in the corn belt and the large Brazilian harvest. In addition, there were two large reversals above 327.000 tons last week and another cancellation yesterday Thursday over 233,000 tons corn shipment for selling pressure. In both cases, Chinese buyers have canceled their bookings. US ethanol production is also slightly lower than in the previous week, and price pressure for corn has also recently come from the crude oil markets.
| Cash markets in view | euros/ton | ||||||||||
| bread wheat | Mar 30 | Apr 5 | Apr 13 | Apr 20 | Apr 27 | +/- | |||||
| Hamburg | 279.00 | 264.00 | 261.00 | 261.00 | 252.00 | -9.00 | |||||
| Lower Rhine | 278.00 | 263.00 | 260.00 | 260.00 | 251.00 | -9.00 | |||||
| Upper Rhine | 272.00 | 257.00 | 254.00 | 254.00 | 243.00 | -11.00 | |||||
| East Germany | 263.00 | 248.00 | 245.00 | 245.00 | 236.00 | -9.00 | |||||
| feed wheat | |||||||||||
| Hamburg | 277.00 | 262.00 | 259.00 | 259.00 | 250.00 | -9.00 | |||||
| Oldenburg | 269.00 | 254.00 | 251.00 | 251.00 | 242.00 | -9.00 | |||||
| feed barley | |||||||||||
| Hamburg | 231.00 | 222.00 | 218.00 | 220.00 | 212.00 | -8.00 | |||||
| East Germany | 221.00 | 212.00 | 208.00 | 210.00 | 202.00 | -8.00 | |||||
ZMP Live Expert Opinion
The signs continue to point to declining grain prices. With the exception of Spain, the growth conditions in Europe are good, the harvest forecast for cereals is significantly better overall than in the previous year and the frequently expected rainfall in the US wheat-growing regions will bring new development prospects to the plants. In addition, there is the Russian harvest, which affects the international price structure. All that remains is the uncertainty from the extension of the grain agreement for Ukraine. Negotiations should become clearer in mid-May.
You see historical data because you're not logged in or not a ZMP Live+ member. Get your information advantage now!
