Wheat prices: 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.

The evolution of the price, very volatile, remains dependent on geopolitical movements such as weather reports. Variations amplified by financial speculation.

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, shortly 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.

Top 10 Wheat Producing Countries (in tons of wheat produced 2020):

1-China — 134,254,710
2-India — 107,590,000
3-Russia — 85,896,326
4-United States — 49,690,680
5-Canada — 35,183,000
6-France — 30,144,110
7-Pakistan — 25,247,511
8-Ukraine — 24,912,350
9-Germany — 22,172,100
10-Turkey — 20,500,000

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