Wheat market gets support, but price increase remains limited

Several factors are currently supporting the wheat market. This provides a firmer foundation under wheat prices above €200 in Paris and above $6 per bushel in Chicago. On Tuesday, the wheat price in Chicago took another sizeable step upward. The U.S. Department of Agriculture expects the wheat acreage in the United States to shrink by 3.5% this year to 43.8 million hectares. That is the smallest area in over a hundred years. In addition, drought concerns are playing a role, especially for hard red winter wheat in the southern growing regions. Positive for European wheat is the rising dollar. As a result, EU wheat is becoming more competitive in the battle on the world market. That is also necessary, because exports of EU wheat are not yet going well. Sales are facing strong competition from the Black Sea region. Geopolitical factors are also playing a role in the grain market. Due to the wars in Ukraine and Iran, food security remains a factor to keep in mind. Moreover there are disruptions on important shipping routes, including around the Strait of Hormuz and the Suez Canal. In short, there is a lot happening in the market. Various factors can further support the wheat price. However, there is also an important brake: the globally large harvest in the 2025-2026 season. Production is above consumption and that is limiting the price increase for now. For the coming season, a tighter balance between supply and demand is expected, which could increase the impact on price formation. Hardly higher The futures market in Paris closed on Tuesday €1.25 higher at €204.75 per ton. This means the price level in Paris is only barely higher than in recent weeks. In mid-March, it was even quoted slightly higher. The new harvest shows larger differences. The September contract is quoted just above €215 per ton, €5 higher than a week ago. The price level of September 2027 has risen to €227 per ton, about €6 per ton higher week on week. In Chicago, trading in soft red wheat closed on Tuesday at $6.16¼ per bushel. That is an increase of 9¼ dollar cents compared with Monday. Over one week, the contract has risen by 26 dollar cents. This puts the value of this wheat moving toward €200 per ton. In January and February, the price was still at €160 to €170 per ton. Part of that difference comes from the dollar exchange rate. In February, €1 got you about $1.19. This week, that has fallen to just under $1.15. That may seem like a small difference, but it amounts to about €7 per ton in the wheat price. The price level of the September contract on the CBoT has risen to $6.38¼ per bushel, equivalent to €204 per ton. September 2027 is even higher at $6.62½ per bushel, or about €212 per ton. Local market weak Locally, wheat price developments remain difficult. In a weak market, the grain exchange in Groningen is steady at €192 per ton. Beurs Zuid (Goes) follows at €188 per ton.