"Middle East Grain Congress-2018", Dubai
DATE
Feb 17, 2018

Volatility of the global grain market requires price hedging strategies – INTL FCStone

Source

APK-Inform

1042

The volatility of the global grain market, especially in relation to the Black Sea wheat, depends on many fundamental factors. Therefore, the necessity arises to hedge risks on the commodity exchanges, declared the Vice President- Eastern Europe/Black Sea Region at INTL FCStone, Matt Ammermann within frames of the international conference "Middle East Grain Congress" in Dubai, on February 17.

According to him, several factors usually influence on the growth or decline of prices. In particular, in the short term increasing of the market operations and fluctuations of the level of protein spread in wheat, are able to raise prices for the grain. But in the long-term outlook, the prices are affected by the decline of the planted areas under wheat in the main regions-producers and dry weather conditions in the USA, one of the key global producers of the grain.

Also, he added that the bearish trend in pricing developed due to the production level of wheat in the world and, in particular, in Russia, which in the current season reached record high harvest volumes. In turn, in terms of falling of the USD/EUR exchange rates the competitiveness of Russian wheat on the global market continues growing only.

In addition, the constantly growing production rates of the Black Sea grain (the annual growth of Russian wheat only is estimated at 12.5 mln tonnes) contributed to strong increasing of the export deliveries of the grain on foreign markets, which in 2018 will possibly exceed 60 mln tonnes, said M.Ammermann.

Also, he noted that in addition to high harvest volumes of wheat in the CIS countries, in the current season the region demonstrated the rise of its yield to 2.9 t/ha for 3 recent seasons, which is somewhat lower compared with the yield figures of European wheat in 2017/18 MY (5.4 t/ha).

You can become acquainted with more detailed information about all key points of the Middle East Grain Congress from its news line at our web-site.

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