The development of grain prices has recently been strongly influenced by external factors such as tensions in the Middle East or assessments of the global economy and the financial situation. As a result, fundamental supply criteria are temporarily pushed into the background. However, the latter are decisive for the medium-term price level.
The recent price slump on the stock exchanges on " Black Monday" initially dragged down grain prices on the leading stock exchanges. Prices have recovered in the meantime, but remain at a reduced level for the time being. Nevertheless, a certain amount of tension remains due to the expected armed conflict between Iran and Israel. In particular, the important grain importing country Egypt, with monthly imports of around 1 million tons of wheat, is coming into focus. Shipments there are within the range of missiles, especially as US warships are positioned in the eastern Mediterranean.
Wheat prices on the Paris stock exchange are nevertheless holding above a resistance line of €215/t for the front month of Sep-24. In Chicago, wheat there is trading at the equivalent of €185/t. The later delivery dates show rising trends until Mar-25.
Following the longer-term relationship between the global supply situation measured by % ending stocks to consumption and the FAO grain price index, derived wheat prices on a Paris annual basis are expected to be in the range of 225 to 235 €/t.
The next USDA assessment of the global harvest, consumption and trade data on the grain market will be published next Monday, Aug. 12, which may provide new orientation data .
Below is the latest information on the market assessment:
USA: The winter wheat crop is around 90% harvested. Only in a few northern states is it only 50 %. In the case of spring wheat, 90 % is still on the stalk in unchanged condition. Although the stock assessments for maize are still higher than in the previous year, they have recently been somewhat less favorable. Due to acreage, the maize harvest is smaller than in the previous year.
Canada: With the exception of barley (-9 %), the 2024 grain harvest is higher than in previous years. However, drought has dampened expectations somewhat in a third of agricultural areas.
Russia: The comparatively early 2024 wheat harvest is estimated at only around 84 million tons (previous year: 91.5 million tons). In the eastern districts, harvesting is still taking place between the rains. Exports are affected by Turkey's temporary import ban, which is putting pressure on prices.
Ukraine: Wheat harvest falls to 19.8 million tons (previous year: 22 million tons) due to drought. The maize harvest is also reduced by -2.1 million tons to 23.4 million tons. Prices have stabilized somewhat.
China: According to Chinese reports, the grain harvest is expected to increase. Nevertheless, grain stocks are to be increased through imports.
India: Wheat and rice harvests are expected to rise. Barley falls by -10%. However, stocks are at a low level and imports remain necessary.
Australia: Higher acreage (+10%) for grain in 2024 and favorable rainfall in the southeast of the country suggest an above-average harvest. In Western Australia, however, the outlook is less favorable.
EU-27: Harvest estimates remain below the previous year's level. Yield reductions have been compounded by quality losses.
ZMP Live Expert Opinion
The search for orientation on the grain market continues. Uncertainty factors due to weather-related harvest fluctuations are increasingly being joined by disruptive factors caused by political and military tensions. However, a downward resistance line is clearly crystallizing.
You see historical data because you're not logged in or not a ZMP Live+ member. Get your information advantage now!
