Big wheat price drop fully reversed

Grain farmers were very worried last weekend when the indicative futures wheat price for December dropped by almost €20/t in just a few days. However, prices have bounced back.

While this is not an actual physical price that growers get for delivering their grain, it is one of the considerations that can influence the setting of green prices post-harvest.

The price drop happened because of factors in the market which indicated, at that time, that conditions looked good for US maize production. The US is the largest maize producer in the world.

Increased global wheat estimate

As well as that, the most recent global wheat production estimate had been increased and weather conditions seemed favourable for maize production in the US.

A few days later, the sentiment on global supply and demand had changed.

The estimate of EU maize production was further decreased and reports from crop inspections in the US suggested that average yield levels were likely to be lower than the official estimates.

The result signalled lower global maize production, which triggered another price hike on Chicago markets.

Higher maize prices, coupled with a weaker euro versus the dollar, has led to increased maize prices in recent days and these are again supporting price increases in other cereals.

Futures prices

At the time of writing, futures prices had fully recovered following a €20/t rise since last Friday.

Some grain assemblers are currently paying an on-account price of around €230/t for green grain, while those who want to commit to sale are being offered around €330/t for dry barley and up to €345/t for dry wheat.

Green prices are currently around €285/t to €290/t for barley and €300/t to €305/t for wheat.