Peace agreement pushes wheat price back below €200

The temporary peace agreement between the United States and Iran is causing the wheat price on the futures market in Paris to fall back below €200 per ton. This follows lower energy prices for oil and gas. Ceasefire, start sailing!, Rabobank headlines on Wednesday 8 April above the daily report on the economy and the markets. It immediately says that unfortunately this is not that easy. Still, the energy markets and grain markets are already moving ahead of a recovery in trade and the war premium is disappearing from the markets. By the end of the morning, the May quote for wheat on the futures market in Paris falls to €198.50 per ton. That means a price drop of €4 compared with Tuesday. This ends a period of a few weeks since early March in which wheat prices on the futures market were above €200 per ton. For the new harvest and later delivery months, prices in Paris are still above €200 per ton. September is quoted at €207.25 per ton around midday despite a drop of €4.50 in the morning hours. September 2027 shows the same price drop and falls to just below €220 per ton. In Chicago, the wheat price rose slightly on Tuesday, despite weather forecasts pointing to precipitation in areas where wheat is being affected by drought. The May contract for soft red wheat was quoted 2¾ dollar cents higher at $5.98 per bushel. Prices above $6 per bushel, such as at the end of March, remain out of sight. The temporary peace agreement is pushing prices down further. Falling dollar increases competition A falling dollar also means more competition for European wheat. Today the euro is rising toward $1.17. This means a temporary farewell to a value just below $1.15. This makes selling EU wheat more difficult. Sentiment is further affected by a good condition of wheat in France. The grain crop is still slightly better off than last year. Argus Media is also raising its estimate of the Russian harvest by 2.2 million tons to 88.7 million tons. That also supports downward price pressure on the EU market. Tomorrow evening, the US Department of Agriculture will come with a new monthly update of global wheat forecasts. Although the trade has already been somewhat anticipating this in recent days, this is probably less influential than the talks between the United States and Iran and the reopening of the Strait of Hormuz.