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Wheat, soybeans and especially corn… World cereal prices have been on the rise again since Tuesday 12 January. The latest report from the US Agriculture Agency is fueling this new outbreak, which is dissuading Egypt from buying wheat for the time being.
Cereals are definitely starting the year 2021 with a bang. Corn prices hit their maximum daily upside on the US futures market on Tuesday. On Wednesday, the surge continued from Paris to Chicago. At 5.39 dollars a bushel, corn is at its highest since mid-2013, soybeans and wheat are at their highest since 2014. In Paris, a tonne of wheat is worth nearly 230 euros.
On January 12, the US Agriculture Agency (USDA) report surprised markets, downgrading the last US corn crop by 8 million tonnes from December. The drought damage to the yields of the Great Plains had been underestimated. US soybean and wheat harvests are also downgraded, fears about new harvests in the southern hemisphere, Argentina and Brazil.
► Also to listen: Brazilian soy soon to be shunned by European buyers?
From China to Morocco, a strong demand for cereals
We are worried about the lean season between now and next September, given the strong international demand. All importing countries, China in the lead, wishing to replenish their stocks, which the Covid has not always allowed. Morocco is more than ever in purchases to compensate for its weak harvest and Rabat has removed its import tax to facilitate them.
Faced with this surge in grain prices, Egypt however abandoned its last call for tenders. For the world’s largest wheat importer, the proposals were too few and too expensive. Even Russian wheat is no longer competitive, Russia imposed an export tax to calm wheat inflation at home and she is thinking of overtaking her soon.
According to FranceAgriMer, this elimination of Russian wheat could allow French wheat to regain market share in North Africa and West Africa in the second part of the season.