Weather conditions will be the main price forming factor on the wheat market — Petkus

Source

APK-Inform

14088

Passing the winter period and now at mid-April the market participants focus on how the crops are shaping up. “We all noticed that winter this season in Europe has been snowless which is highly unusual. Which is basically means that the water reserves are quite low and the precipitation will be needed regularly. The market – both the traders and farmers – are taking this situation quite nervously” – said Natalja Skuratovic, Key Account Manager Grain, PETKUS Technologie GmbH in an exclusive interview to APK-Inform Agency.

If we look for example at French market, we have had the situation when the planting of wheat was lower 3-5% year-on-year. On the other hand, if we look at the field, the grain looks “ok” but definitely not “great”. In particular, if we look at FranceAgriMer agency estimations of wheat condition from good to excellent, we will see a huge difference. This year there are only 61% of good to excellent wheat as opposed to 83% at the same time last year. The same situation can be observed in Poland, Germany and other European countries. This is basically needs to be watched.

If we look at the market of Egypt, the country has come back on the market and is ready to pay quite hefty price for wheat.

Looking at Black Sea region, Russia has received timely rains and in Ukraine the crops are so far so good. Bu the markets are nervous and the weather patterns changes will result in the price changes on the wheat market.

Also, we should not forget about the North African countries, where people are very worried about the food stability. In particular, in Algeria the people were stockpiling in view of the political uncertainty, because the government there is not well-placed to assure the regular supply of food. But of course it will do its best to provide the food security, as Egypt is doing for example. In particular, the government of Egypt is going to increase the stocks of wheat up to 4 months’ supply, which is significant, especially in view that crop is coming in about 1.5 months.

“So definitely, this is interesting situation on the market of wheat for traders” – summed up the expert.

 

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