Last Friday, the wheat market started with a tailwind from the previous days. SRW and HRW wheat in particular were initially able to make gains, while trading remained characterized by a generally thin news flow. Among other things, attention was focused on France, where the proportion of stocks rated good or excellent fell to 84% according to FranceAgriMer. Weather reports from the US also came into focus, as high temperatures and strong winds triggered fire warnings in parts of the Plains and Midwest. Over the weekend, it was announced that the US and Israel had decided to intervene militarily in Iran. As a result, the mood on the grain market at the start of the week was wait-and-see. However, US prices came under pressure towards the middle of the week. Weak export figures from the US Department of Agriculture and rain forecasts for parts of the Southern Plains weighed on sentiment. At the same time, the EU Commission reported rising wheat exports since the beginning of the marketing year. Trade was also influenced by geopolitical developments. Hopes of an easing in the Iran conflict caused risk premiums to shrink in the meantime and depressed prices both in the USA and on Euronext. However, the mood turned again towards the end of the week. The renewed escalation of hostilities in the Middle East caused crude oil prices to rise and led to sharp increases in SRW and especially HRW wheat prices. Ongoing drought indications for parts of the western Plains also had a supportive effect.
The maize market also showed a mixed trend at the start of the week, before weaker US export data put pressure on prices in the short term. Despite declining weekly figures, export levels remained significantly higher year-on-year. In the middle of the week, private export reports and rising prices in Europe provided support. At the same time, ethanol production in the USA remained at a high level. In the meantime, the prospect of a possible easing of tensions in the Iran conflict weighed on prices, as there was a renewed focus on the extensive global inventories. Towards the end of the week, however, rising crude oil prices and surprisingly strong export bookings of more than two million tons of corn led to a significant recovery. In addition, rainfall improved stocks in Argentina, while the harvest there is slowly gaining momentum.
ZMP Live Expert Opinion
The markets currently remain heavily dependent on geopolitical developments. The Iran conflict in particular could continue to cause significant fluctuations in the short term, as energy prices and freight rates have a direct impact on agricultural markets. Reports on the conflict paint a mixed picture. There is currently no end in sight. At the same time, weather developments in the US Plains are coming back into focus. If drought problems there become more widespread, this could provide additional support for the wheat market. Demand from the export business remains a decisive factor for maize. The recent strong bookings show that international demand remains robust. Overall, volatility is likely to remain high.
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