The wheat markets were initially under pressure last week. At the start of the week, declining demand and technical selling weighed on prices. SRW wheat in Chicago was particularly affected, falling significantly, while HRW and spring wheat in Kansas City and Minneapolis also declined. Strong export demand was initially unable to halt the downward trend, although shipments increased significantly compared to the previous week. The weakness in Paris also continued initially. It was not until the middle of the week that a short-term technical recovery and speculative buying provided a boost, with SRW and HRW wheat in particular benefiting. However, the recovery proved to be fragile due to a lack of fundamental impetus. Confidence only returned towards the end of the week with solid US export bookings and a weaker euro. A large order from Algeria and export expectations for the Black Sea region also had a supportive effect. Nevertheless, the significant upward revision of the EU wheat forecast dampened the upside potential. Market players are now eagerly awaiting the medium-term impact of improved yield expectations in Argentina as a result of abundant rainfall.
The maize market was also initially dominated by red signs. Prices initially fell, supported only by technical counter-movements. Fundamentally, the accelerating harvest progress in the USA and declining ethanol production figures coupled with rising inventories weighed on prices. The export trend finally provided a late stabilization: the strong demand for US corn in particular, with a record number of new bookings for the current season, created a friendlier market environment. Nevertheless, the mood ahead of the quarterly report remains volatile.
ZMP Live Expert Opinion
Despite interim recoveries, the market environment for wheat and corn remains directionless for the time being. Although export momentum is providing positive impetus, the sharp upward revision of EU harvest forecasts and robust inventories in the USA are clearly having a dampening effect on prices. On the wheat market, geopolitical developments relating to Algeria and Argentina could cause temporary fluctuations. Corn prices are being supported by the record number of new bookings, but the current harvest progress is likely to continue to put pressure on prices. A clearer trend is only likely to emerge after the publication of the USDA quarterly report. Until then, technical volatility will dominate.
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