Grains News, 22nd / Aug / 2024

Since mid-August, the Paris exchange prices for wheat have fallen unexpectedly sharply from the previous € 215 to € 225/t to the € 200/t line. This was preceded by price slumps on the Chicago Stock Exchange. Against the backdrop of multiple harvest estimates resulting in a continued global supply shortage in 2024-25, the price declines initially appear contradictory.

However, the current relationship between supply and demand in the global trading business is decisive for the current price trend. The following influencing factors are of decisive importance:

• In the northern hemisphere, the main grain harvest o. corn has largely been completed. This creates a certain supply pressure. Free storage space must be ensured in the maize-growing regions.
• The Argentinian and Australian harvests are due in Nov./Dec.24 and promise an above-average result as things stand at present.
• Although the Russian and Ukrainian harvests are significantly smaller than last year, they are not as bad as originally feared.
• US wheat production is estimated to be 8 to 10 % higher than the multi-year average. More than half of this is exported.
• Although the EU grain harvest is considerably smaller, the export surpluses are not very competitive on the world market due to the strong euro exchange rate and are putting pressure on the domestic market.
• There are usually strong efforts to place as much of the exports as possible on the market before the uncertain winter frost period. This applies in particular to the Black Sea countries.
• Turkey has imposed an import ban until mid-Oct.24.

In the meantime, there are increasing signs that the previous downward trend is losing momentum. In Ukraine, minimum export prices and export ceilings are being considered. In Russia, export taxes are being considered again. Importing countries are increasingly taking advantage of the opportunity to buy at lower prices.