Wheat trade operates under the grip of exchange rates

The exchange rates currently determine where trade buys wheat. The EU benefits from a weaker euro, while the US and Russia have to watch due to a stronger dollar and ruble. The Russian market advisory agency SovEcon notes that Russian wheat prices are dropping for the first time since August. Wheat prices fell last week to the equivalent of €174 to €177 per ton. This means prices are about €3 lower than in the previous week. This is not very shocking, but it is an indication that the price recovery is stalling. The decline is attributed to a stronger ruble against the dollar and a somewhat weaker demand from the northern regions of Russia. Russian exporters are expected to further lower their purchase prices, according to SovEcon. They do this because they want to improve their margins and on the sales side, there is currently little profit to be made. The export prices in dollars remain stable at a level of just under €200 per ton. On the purchasing side, they see room to negotiate because farmers need money and therefore appear willing to accept lower prices. The weaker euro has kept prices stable in the futures market in Paris. The December contract has been stable at €187.75 per ton since Friday. In Chicago, prices are declining. On the CBoT, a price level of $5 dollars is slowly coming into view. On Tuesday, the market closed at $5.06¾ per bushel. Three weeks ago, the price was still at $5.34 per bushel, so the price has dropped by 5% since then.