Drought in Russia: Grain region particularly affected
In Russia, the main region for grain cultivation has been experiencing dry conditions for weeks. This is likely to result in lower yields and poorer quality than previously expected.
The combination of cheap US export wheat, uncertain prospects in the trade dispute, and growing weather with rain in the Black Sea region is currently putting pressure on wheat prices. This is hampering the market.
A recent market assessment by Jan Peters, Peters Agrar Data GmbH:
Wheat prices in Paris continue to decline at the beginning of this week and are only just above the €200/t mark. Prices for the new harvest are especially losing ground. The slight recovery from the weekend is over.
Cheaper US wheat
One reason for the declining prices is seen in the weak corn at international exchanges. Furthermore, talks between China and the US have not taken place yet, dampening the prospects of preventing the announced tariffs. In addition, wheat exports from the US are not reaching the expected level in the market. The low prices for US wheat are affecting the exports of EU origins to the global market.
Rain impacts prices
Rainfall, including in the Black Sea region, is leading to further price declines. With a better supply from this region, the opportunities for the export of wheat from the EU are also diminishing. In Germany, there has been regional rainfall, at least. This at least offers hope for a recovery of stocks and thus better yields.
Hesitation in the cash market
There is still not much happening in the cash market. Sellers and buyers are facing each other without significant movement. The new harvest is also generating little interest on both sides.
Current cereal producer prices