variations amplified by financial speculation

On Euronext, the ton of wheat, deliverable in September, ended the week, Friday June 3, at 378 euros. Two weeks earlier, on May 16, it was trading at a historic high, at 438 euros per tonne. A slight cooling in the price of cereal on the European Stock Exchange, which therefore resulted in a decline of nearly 15% in its value. Same development in Chicago, where it closed the session on Friday at 10.40 dollars (9.70 euros) a bushel, down nearly 20% from its peak in March. Despite this withdrawal, golden grains are still very valuable, with prices up almost 40% since the start of the year, propelled by the invasion of Ukraine on February 24.

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The evolution of the price, very volatile, remains dependent on geopolitical movements such as weather forecasts. Variations amplified by financial speculation. “The discussions initiated by [le président russe] Vladimir Putin to create a maritime corridor in the Black Sea to facilitate Ukrainian grain exports led to a market correctionaffirms Arthur Portier, of the firm Agritel. The financial players are reselling part of their position, counting on an easier flow of the 25 million tonnes of grain, including 7 million tonnes of wheat still stored in Ukraine. »

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In mid-May, it was Indian Prime Minister Narendra Modi’s decision to ban the export of wheat that ignited the markets. This, even though he had announced, a short time before, his desire to “feed the world” and to remedy the lack of availability of this cereal following the invasion of Ukraine by Russia. Its brutal about-face had taken the markets on the wrong foot. India, the world’s second largest wheat producer behind China, but not very present on the world trade market, is concerned about ensuring the food security of its population. However, a heat wave has eroded the production potential of the current harvest and inflationary pressures are high.

The key role of Russia

Mr. Modi, however, stressed that the export contracts already negotiated would be honored and discussions are underway with Egypt to exchange wheat for fertilizer. In this tense context, everyone is wondering about the production volumes for the 2022-2023 campaign. For now, all the lights are green in Russia. More than ever, the country led by Vladimir Putin will play a key role in the grain trade this year. Following the blockade decreed on European agricultural products, in 2014, during the annexation of Crimea, a blockade that was never lifted, Russia built its agricultural force and established itself as the leading exporter world wheat market, with 18% of volumes.

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