Wheat prices jumped sharply on global futures markets last week, driven by geopolitical tensions and unpredictable weather. The gains slowed after analysts downplayed crop damage concerns. Ongoing international uncertainty continues to influence the market.
Futures market surges
Wheat prices on the futures markets rose sharply last week as a result of geopolitical tensions and the weather. The Paris futures market saw the March expiring contract make a jump for the first time last week. The price went from €190.50 per ton on Tuesday, February 17 to €197.00 on Friday, February 20. This levelled off to €195.25 on Tuesday, February 24.
Geopolitics and weather factors
The price increases were a reaction to the conflict between the US and Iran. The threat of a military confrontation grew. In addition, a lack of rain in important growing areas elsewhere in the world and possible frost damage in the US caused unrest. Last week, it was reported that heavy rainfall in France might have caused damage to the winter wheat crop.
Market reaction softens
At the beginning of this week, analysts downplayed the reports about possible rain damage. The stronger euro and profit-taking led to slightly falling wheat prices on Monday and Tuesday. The fact that these declines remained limited is a result of the ongoing geopolitical tensions.
