2023-05-03 14:17:04
By Le Figaro with AFP
Published
This content is not accessible.
Russian wheat at “cut prices“abundance of brazilian corn : nothing seems able to stem the fall in world grain prices in the short term, in an ignorant market geopolitical risks linked to the war in Ukraine, say analysts. “The downward spiral is deepening, under mainly economic pressure: the market is reacting to the fall in oil prices, to another bank failure in the United States and generally to fears of a slowdown in growth“Comments Arthur Portier, analyst at Agritel.
On Euronext, a tonne of soft wheat traded on Wednesday below the 230 euro mark for delivery in September, at its lowest level since August 2021, with corn evolving in canned condition, around 225 euros per tonne for delivery in June. After “seven consecutive months of decline» Cereal prices on the European market, «we arrive below the production costs for the farmers“, emphasizes Arthur Portier.
This content is not accessible.
With the tripling of fertilizer prices in 2022, French grain growers “bought their nitrogen solution (for the 2023 campaign) at around 600 euros per ton, bringing their cost of wheat production to 250 euros per ton“, while they only withdraw from the sale about “205 euros per ton at present“, he notes. The downward trend in prices is the same in the United States, where the price of the benchmark contract for soft red winter wheat (SRW) winter wheat fell below $6 a bushel on Tuesday (approximately 27 kg), at its lowest level since the end of March 2021.
Parts of the Midwest have benefited from rains in recent days and the US Department of Agriculture’s weekly report showed a slight improvement in crop conditions for winter wheat, suggesting lower price. “Stocks (of wheat) are stretching (…), but honestly, for the moment, nothing can stop this short-term drop. Russia has a lot of wheat that it dumps on the market at bargain prices“, notes Arlan Suderman, of the StoneX brokerage platform.
under the floor
Witness the latest tender from Egypt, which negotiated hard for the 655,000 tonnes of wheat purchased on Tuesday, mainly from Russia, at prices falling below 260 dollars per tonne. “European prices were practically aligned with the Russian floor price, at 275 euros per ton: to win this call for tenders, the Russians, who still have a lot of stock, went very low. And Egypt, which does not usually buy at this time, made an opportunity purchase“says Damien Vercambre of the firm Inter-Courtage.
At these price levels and given transport costs, American wheat is not competitive and corn, which is about to face stiff competition from Brazilian yellow grain with the new June-July harvest, “might have hit a low“, according to Franck Cholly of RJO Futures, after the cancellation of a Chinese order of 560,000 tons last week. This general fall in prices is good news for importing countries, particularly in the Maghreb where a new wave of drought will reduce the yields of the crops expected in a few weeks.
«The bearish momentum is so strong that the markets do not take into account the elements of uncertaintyon exports from Ukraine, whether via the maritime corridor which expires on May 18, or via European land routes after the bronca of five States (Poland, Hungary, Slovakia, Bulgaria, Romania) denouncing direct competition of their own productions, points out Arthur Portier. The European Union has announcedexceptional safeguard measures“, entered into force Tuesday, for wheat, corn, rapeseed and sunflower seeds, which can transit through these five countries but not be sold there.
This content is not accessible.
As for the agreement on the black sea corridorthe negotiations which are due to resume in Turkey in the next few days promise to be difficult but the market “don’t believe in closureof the corridor, includingChina and Turkey are the first customers“says Damien Vercambre.
1683128242
#World #grain #prices #downward #spiral