Wheat price trends amid trade tensions
A trade war initiated by Donald Trump and revised estimates are causing unrest in the wheat market.
Wheat market developments
Developments in the international wheat market are unfolding rapidly. International markets have shown a downward trend since 11th February. The Paris futures market for May delivery was at €242.00 on that date, and by Monday, 3rd March, it had dropped to €225.50.
Impact of US tariffs
The international market is impacted by higher import duties imposed on agricultural products by US President Trump. Earlier, he announced a 25% increase in tariffs on imports from Canada, Mexico, and China, sparking a trade war. The 3 countries have retaliated with countermeasures that could hinder US agricultural exports. This trade war is also affecting wheat trade. China will impose a 15% tariff on imports of US wheat and maize, as well as a 10% tariff on soy, meat, and dairy from the US.
Wheat harvest estimates
Other developments affecting the wheat market are related to harvest estimates. The Australian agricultural authority, Abares, estimated the 2024-2025 wheat harvest at 34.1 million tonnes, 2.2 million tonnes more than the previous estimate and above the current USDA forecast of 32 million tonnes.
Pressure on wheat prices
On Euronext, wheat prices have been pressured by the stronger euro. Price increases at Russian export ports have temporarily stalled due to weak demand. SovEcon lowered its Russian wheat export estimate by 100,000 tonnes to 1.9 million tonnes in February, far less than the 4.1 million tonnes in February 2024.
