European wheat markets traded steadily lower this week in the wake of last Wednesday's global price spike. Many of the supportive factors remain in play, but uncertainty over US-China trade talks and nervousness surrounding the Coronavirus outbreak were enough to spark a round of fund selling in agricultural commodities, including Chicago wheat and corn.
Data from Brussels put EU wheat exports 70% ahead of last year's pace and this looks set to continue, with French wheat currently the cheapest in the world. Despite this, Matif mirrored Chicago, trading €5 lower in the aftermath of last week's 17-month highs.
UK old crop exports have slowed to a snail's pace and consistent domestic demand has pushed premiums to a level that will limit further port business in the short-term. With around 1 million tonnes surplus to export or roll to next year, the market is still considering all outcomes and weighing-up how these will impact next year's supply and demand.
In the meantime, we continue to see old crop Russian wheat trading at a premium to new crop due to strong demand and rumours of export taxes. July to December wheat exports were reported at 22.2 million tonnes which is around 3 million behind last year's pace but, nonetheless, we've seen port prices trading at their highest level since February 2019. The inverse into new crop reflects a huge planting effort and a favourable weather forecast which could result in an 80+ million tonne crop, adding weight to 2020 exportable supplies and growing world wheat stocks.