Weaker euro strengthens EU position on grain market

A slightly lower value of the euro has slightly improved the position of the European Union on the wheat market compared with competition from the Black Sea region. That led to a slight price increase on Tuesday on the futures market in Paris. On Monday, the wheat quote for the May contract on the futures market in Paris briefly fell below €200 per ton. In the end, trading still closed well above that level. That does mean a lower start to the week with a closing price of €202.25 per ton. A weaker euro caused a recovery again on Tuesday and that pushed the wheat price €1 higher to the same level as Friday. So very little has changed. What is clear, however, is that prices are volatile throughout the day. On Monday, the difference between the highest and lowest price of a contract was €7 per ton. Traders reacted sharply to reports about the war in Iran. Mixed reports are causing nervous trading. One moment the market is pricing in a war premium, the next moment it is lowering the price because a ceasefire seems within reach. Apart from the war, there are several other factors currently supporting the wheat price. Drought continues to affect wheat in the Southern Plains of the United States. The condition of winter wheat in Kansas, Oklahoma and Colorado deteriorated further over the past week, according to the drought report from the US Department of Agriculture. With the necessary rainfall still absent from the weather forecasts, this is supporting wheat prices on the futures market. On the CBoT, the wheat price rose by 2.25 dollar cents on Tuesday to $5.90 per bushel. Converted, that comes to a price of €187 per ton. Compared with Chicago, the European grain market benefited slightly from a weaker euro. The value of this currency fell on Tuesday to $1.157. This gives EU wheat a small boost compared with wheat from the Black Sea region. Competition from that region is strong. Market advisory bureau SovEcon has raised its export expectations for Russia this season by 1.1 million tons to 46.5 million tons. For the 2026 harvest, too, the market advisory bureau has revised its forecast upward significantly. Based on strong demand for wheat, SovEcon expects Russian wheat exports of 43.8 million tons in 2026/27, which is 2.1 million tons more than the previous estimate. After a year of surpluses, importing countries appear to be becoming more active on the international market, the market advisory bureau explains the revision. The mood is being driven by continued drought in the United States. In addition, production in Europe and Ukraine is under pressure as a result of sharply rising fertilizer prices.