Wheat prices were under pressure throughout last week. On the CBoT, both SRW and HRW wheat recorded new lows one after the other, with the SRW March contract falling to its weakest level since October. The main cause remained the massive global supply. Argentina in particular, where the harvest forecast was raised to a record 27.7 million tons, and Australia provided bearish impetus. At the same time, persistently high inventories in the northern hemisphere and disappointing US export data weighed on sentiment. The USDA has already revised a Chinese wheat order downwards, fueling fears of further cancellations. In addition, there was speculation about progress in peace talks in the Ukraine war, which further reduced geopolitical risk premiums. Only Russian export prices remained stable due to high demand. On Euronext, the Paris market largely followed international guidelines, although there was a slight recovery towards the end of the week. However, the firm euro and the higher EU harvest estimate limited the upward momentum.
Corn prices also initially came under further downward pressure. The renewed confirmation of record expectations in Argentina and almost ideal conditions in Brazil ensured that the downward trend continued until the middle of the week. The market only turned around on Thursday. The decisive factor was a new all-time high in US ethanol production, which was also flanked by falling inventories. Competitive FOB prices and robust export figures also had a supportive effect. In Chicago, the March contract closed two days in a row in positive territory. On Euronext, on the other hand, trading remained largely directionless, although a slight increase was recorded at the end of the week.
ZMP Live Expert Opinion
Despite the slight price recovery at the end of the week, the picture on the international grain market remains bearish. The strong Argentinian harvest forecast is setting new standards, while the southern hemisphere as a whole is expecting above-average yields. The wheat market is also suffering from possible Chinese cancellations and the expectation that US export demand will remain weak. Although the strong ethanol figures are providing a short-term boost for maize, global supply remains comfortable here too. If the peace signals from Eastern Europe continue to intensify, the pressure on both markets could increase. A sustainable trend reversal is therefore not in sight for the time being.
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