2023-12-06 17:39:09
Paris (awp/afp) – Wheat prices have risen sharply in recent days, thanks to Chinese purchases in the United States, without however disrupting global trade in bread cereals, still dominated by Russia.
The announcement earlier this week by the US Department of Agriculture (USDA) of the sale of 440,000 tonnes of SRW (Soft Red Winter) variety wheat to China has revived a struggling export market in the United States. .
On the Chicago Stock Exchange, a sixth consecutive session of increase on Tuesday brought the price of SRW variety wheat to 6.3125 dollars per bushel (around 27 kg) on the March deadline, the most traded, an increase of nearly 18% over one week.
The same upward momentum has spread to the European market, where the price of wheat rose on Tuesday to around 230 euros per tonne for the March deadline, following falling to 222 euros at the end of November.
However, important nuances were highlighted by analysts on Wednesday, who observed a two-sided wheat market, between Chicago and Euronext.
“There is on the one hand the Chinese ogre which arrives in Chicago, which stimulates buyouts by investment funds and drives up prices, and on the other hand a European market which follows but to a lesser extent: we have not seen the return of China in Europe and we are still suffering from the commercial weight of Russia,” summarizes Sébastien Poncelet, from the Agritel firm (Argus Media group).
Referring to the price of American wheat, Dewey Strickler, of the consulting firm Ag Watch Market Advisors, sees more “an intermediate floor” than a sign of a lasting rise in prices.
“This is not going to revive the wheat market,” agrees Jake Hanley, of Teucrium Trading. “We are done with the downtrend, but we should just oscillate for a while. For us to really start to rise once more, stocks will have to fall or we will have a new war-related alert ” in Ukraine.
Egypt buys Russian
Because, in the absence of major news concerning the state of crops, harvest forecasts or the climate, it is clear that “in terms of fundamentals, nothing has changed since last week”, underlines -he.
Sales to China, the world’s largest importer of wheat but an occasional buyer in the United States, “provoked hedging purchases” on the part of investment funds which had bet on the decline and wanted to protect themselves once morest a rise in prices. price, Dewey Strickler analysis.
These purchases “are probably the main source of support for the wheat market,” he believes.
In the corn market, bearish bets are at their highest in a year. “We can therefore expect, here too, hedging purchases.” But, he notes, stocks are enormous and “(American) exports are not extraordinary (…). Most of the movements come down to putting one’s portfolio in order before the end of the year.”
On the European side, the equation is a little different.
The drop in prices in recent weeks has allowed French wheat to find export outlets, particularly in Morocco, while the Moroccan National Cereals Office announced the extension from December to April of the country’s import program, victim for two years of severe droughts.
In addition, “the surge in sea freight prices – linked to the rise in oil prices – has favored purchases of French cereals on local markets, such as North Africa”, noted Sébastien Poncelet.
The weakness of European competition also led to a recovery in Russian prices during “the entire month of November”, noted Andreï Sizov, of the SovEcon firm.
But that was not enough: Russia and Ukraine won an Egyptian call for tenders on Tuesday, winning respectively a contract of 120,000 and 60,000 tonnes for deliveries at the end of January.
“France had an offer at 256 dollars per tonne FOB (excluding transport costs) and Russia at 255 dollars. But with the price of freight, French wheat was still too expensive,” explained Edward de Saint-Denis, of firm Plantureux & Associés.
This failure of the French supply and the low volumes involved led to a clear downward correction on Euronext wheat on Tuesday, before a new rebound on Wednesday.
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