Getreide Cockpit, 13.04.2018

Grain prices in search of a firm focus - Wheat fluctuating - Corn with a slight upward trend The wheat and corn prices on the stock markets are currently experiencing a period of sharp fluctuations. There are a number of causes for this. The wheat sector is in a transitional phase from the old to the new harvest. According to the latest USDA estimate, the supply situation is well above average worldwide. The surplus stocks in the following year reach record levels. However, it should be noted that approx. 40% of the wheat stocks in China are stored, which as a rule does not provide any exports for a need outside of China.Because of its high harvest results, Russia is still able to provide substantial wheat exports. The EU also has sufficient export reserves from the old harvest. The prospects for the coming wheat crops are less abundant. In the US, a below-average harvest is expected due to reduced acreage and weak seed stock. Recent dry and frosty phases in the US growing areas additionally reduce a possible harvest result. On the other hand, one relies on a good average summer wheat seed.For the EU , only slightly average wheat harvests are expected due to reduced acreage with a focus on the northeast and delayed vegetation development. A partial compensation is conceivable over the high surplus stocks because of failed exports. In Russia , 2018 is not expected to repeat the unusually high previous year's harvest. This should reduce the Russian export pressure in the coming marketing year. Rising Russian wheat prices are already pointing in this direction. Among other things, China is trying to reduce the high wheat surpluses by reducing state price guarantees.In the southern hemisphere (Australia, Argentina), the after-effects of the La Niña dry phase will be digestible. In the corn sector , the utilization of the old harvest is still in the foreground. The dryness-related losses in Argentina and Brazil of the current and future crops in this marketing year play the role currently determining price. For the coming year , reduced US acreage planning signals a smaller harvest than in previous years. As a result, the supply situation in the corn sector will be much lower than in the past.Last but not least, the uncertainties in the trade dispute between the USA and China are constantly creating new assessments of the development of trade flows. Although the grain trade between these two parties is not particularly pronounced, it does, however, develop signaling effects for the futures prices on the stock exchanges. Overall, the current grain price level has dropped significantly from its previous low phase. But the higher prices still show little stability. This development will continue for a while due to weather and politics.