(BFM Bourse) – The cereals market has remained volatile in recent days, tossed between fears of a recession and the prospect of an easing of health measures in China. On Euronext, wheat is moving in a range between 300 and 310 euros per tonne.
Grain prices have remained volatile in recent days in a market fearing a global recession, with pending central bank announcements on monetary policy and the easing of health restrictions in China contributing to this unrest.
On Euronext, wheat remained in a range between 300 and 310 euros per tonne, again coming close to falling the symbolic threshold of 300 euros on Wednesday around 3 p.m. GMT.
A price of wheat “very influenced” by the macroeconomics and the funds
If the weather and geopolitics remain the compasses of the market, the price of wheat has been “very influenced by macroeconomic considerations and the movement of funds” of investment, explains Sébastien Poncelet, cereal specialist at Agritel.
Euro/dollar parity, oil prices and fund positions generate, according to him, more volatility than the state of crops or even trade.
The price of oil, he recalls, is the “thermometer of financial appetite”, and has a strong influence on the price of wheat. By stabilizing around 70 dollars a barrel (75.85 US dollars in New York) on Wednesday, it limits the fall in the price of this cereal. The relaxation of health restrictions in China, which is accompanied by an explosion in the number of cases, generates a lot of volatility on the markets, but also holds back the fall in prices.
China, a customer of choice for American soybeans
The possibility of an awakening of Chinese demand raises the hope of the United States, which could find a customer of choice for American soybeans and thus compensate for weak exports of corn or wheat. In Chicago, cereals and in particular soybeans rose at the start of the week, after a decline in the previous days. Inflation, in fact, slowed more than expected in November over one year, to 7.1% against 7.7% in October, explains Dewey Strickler of Ag Watch Market Advisors.
The monetary policy announcements from the US Federal Reserve (Fed) on Wednesday and those from the European Central Bank on Thursday could again reshuffle the cards, with markets worrying about a global economic recession.
Pending the Fed meeting, the dollar moved Wednesday close to its lowest since June against the euro.
“When the euro is strong, European cereals are less competitive for export, which lowers prices (on Euronext) but raises those of Chicago”, recalls Damien Vercambre of the firm Inter-Courtage.
American wheat looking for buyers
Despite the influence of these macroeconomic factors, the Black Sea corridor continues to play a “key role in the balance of the market” for cereals, believes Sébastien Poncelet.
Russian strikes in Odessa and southern Ukraine on Saturday damaged electrical installations at ports, and the lack of inspectors from Moscow to check boats under the deal is slowing the pace of shipments, says- he. International demand for wheat is accelerating, in a “rather well balanced” market, according to the analyst.
France is not reducing the pace and continues to export to China or to certain African countries, which cannot reduce their supply whatever the price.
US wheat, on the other hand, is struggling to find buyers. The United States castigates “weak and aggressive offers on the world market from Russia”, which has a bumper harvest, and “seeks liquidity to finance the war”, underlines Jack Scoville of Price Futures Group
According to him, the demand for American corn is not managing to take off either, in the face of competition from South America which has “much better harvests”. Despite beneficial rains in recent days, the drought in Argentina is still closely scrutinized by operators.
In the European Union, which also experienced an exceptional episode this summer, maize imports are at their highest, exceeding 13.13 million tonnes, against 6.02 last year to date.
Inventories in Ukraine and the rebound in Brazilian production offset European losses, which limits the rise in grain prices. Corn was selling at 283.25 euros per tonne on Wednesday at 3 p.m. GMT on Euronext. In the wake of oil and palm oil, rapeseed also stabilized around 559.25 euros per tonne.
(With AFP)
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