Wheat, corn and soybeans have seen their prices increase over the past week on world markets, a sign of a definite rebound in cereals and oilseeds despite a very brief fall in rapeseed following the announcement of a Chinese investigation. From the Chicago Stock Exchanges to Paris, “we have a rebound”says Jake Hanley, analyst at Teucrium Trading. Wheat has gained 3% in eight days on Euronext, where the tonne was selling at midday on Wednesday at 220 euros on the most traded deadline (December). Corn continued its rise (+7.5% since the end of August), at 204 euros per tonne on the November deadline.
“All markets are rebounding”taking into account various factors including “a technical rebound movement fueled by investment fund buyouts” after weeks of sharp decline and “a little less ideal weather on the American Corn Belt where it is drier”summarized Sébastien Poncelet, analyst at Argus Media France.
And finally, he added, “It’s as if the wheat market suddenly remembered that there was a catastrophic harvest in France.”Europe’s leading producer and exporter of bread cereals. Argus Media has estimated the French wheat harvest at 25.17 million tonnes for 2024, almost 10 million tonnes less than the previous year.
Also readGlobal food prices torn between falling cereal prices and rising meat prices
Bounce «artificial» ?
While this poor performance, linked to excess rain and a lack of sunshine, will not have any impact on domestic and European supplies, it will weigh on exports outside the EU, estimated to be down 60% by the specialist firm. Does this rebound in prices mark the end of the downward spiral of recent months? “It seems that the trend has been reversed on the three grains (wheat, corn and soybeans)”juge Dewey Strickler, d’Ag Watch Market Advisors.
According to this analyst, the markets have integrated the good upcoming American harvests of corn and soybeans, and the funds have liquidated their positions on the downside, particularly on corn. “This should continue, which will support prices.”he said. “As for going much higher, it may be difficult, because the competition from Brazil and the Black Sea is still there”he noted.
Arlan Suderman, an analyst at brokerage platform StoneX, is more cautious. “It will depend on the upcoming performance figures” et “If these harvests are as large as expected, there will not be enough space to store them. This will put pressure on prices.”he warns. In Dunkirk, in the north of France, broker Damien Vercambre judges for the moment the rebound in prices “a bit artificial”because the demand is not yet there. “In France, for the moment, we only export barley.”
The weight of China
The global price balance will depend a lot on the attitude of the Indian and Chinese giants. We are already seeing a slowdown in Chinese imports of cereals such as barley, notes Argus Media. What will happen to oilseeds (rapeseed, soybeans)? For the time being, Chinese orders for American soybeans are continuing. From August 20 to Tuesday, they reached 990,000 tonnes, according to the US Department of Agriculture. However, according to the first figures for the 2023-24 campaign, which ended at the end of August for corn and soybeans, soybean exports fell by 14% over one year and corn exports increased by 40%.
Rapeseed prices remain high and trending upwards, despite Tuesday’s acrobatic session. Anecdotal but revealing of the weight of China – which buys half of Canada’s annual canola (GMO rapeseed) exports – the announcement of the opening of an anti-dumping investigation into Canadian rapeseed has caused panic.
Prices plunged sharply before recovering just as quickly. “On the Canadian side, the market quickly slowed down, since exports will continue during the investigation.”noted Sébastien Poncelet. Canada is the world’s leading producer and exporter of this seed, which is used to produce oil, livestock feed and biofuel.
