Getreide Cockpit, 05.11.2015

Wheat prices with a bang - corn prices relatively stable

Since the beginning of the marketing year 2015/16 wheat prices on international exchanges have seen again €180 depending on strong impetus towards t a tight Valley ride of over €200 / tonne to less than €150 / tonne.

Depressed expectations for the crop were 2015 given the dry months of early summer in large parts of Europe and due to precipitation rather unfavourable conditions in the U.S. grain growing areas. These prospects have driven prices before harvest begins on the order of €200 / t u.m..

Increasingly the European harvest is inserted, it turned out that the ad time has led not to the feared loss of earnings at the cereals except for the corn.

The Commission confirmed this assessment in its new publication, however end Oct. 15 with 2 faces. The estimators surprised with a record EU crop wheat to 157 million tonnes. The EU maize crops suffered earnings between 20% and 25%.

In other parts of the world there are mixed results. Good results in the Black Sea regions and China face poor wheat harvests in the United States, Australia and Argentina. The El Niño weather event is suspended as a sword of Damocles over the connection harvests in the southern hemisphere with drought in South East Asia and to much rain in southeastern of South America.

The global corn harvest remains significantly behind the previous year back. The United States, European Union and the Ukraine have significant share of it. Yet the South American results from first and second harvest are uncertain. In addition to the El Niño weather effect here also political decisions in Argentina in terms of export control play a role.

Meanwhile, the knowledge prevails, that the statistically average good supply situation the China effect contains. 40% of world cereal stocks, which may raise the global status of the supply, but for the requirements of the import countries are not due to missing export activities of China's focus in the Middle Kingdom. A significantly lower volume of stock to hedge additional demand gaps turns out on closer examination of the supply potential of the leading export regions.

Unusually high demand for additional import in appreciable magnitude, countries report India, Ethiopia, Iran and others. The North African Mediterranean countries and the Middle East are developing a brisk import activity.

Latest news about seeding delays in winter cereals in magnitude between 20% and 35% in parts of Russia and the Ukraine cast their shadow on the future supply situation ahead. A targeted redesign of Russian export taxes unsettled future trades.

Last not least, the changing currency rates contribute to the change in the flow of goods. The weak euro exchange rate allowed exports from France towards Mexico, right on the doorstep of the United States. Wheat is sold from Poland and the Baltic States to Egypt. The ruble has become somewhat stronger and reduces the existing competitive advantage.