Despite a sharp decline in global stock markets, international wheat prices have remained stable and even showed positive momentum as of Monday. Unlike other commodities, wheat has not been significantly affected by the escalating global trade tensions or falling equities.
Wheat market shrugs off Trump’s trade war
The ongoing US trade war, intensified by tariffs under the Trump administration, has had minimal impact on the international wheat market. On the contrary, wheat prices gained ground on Monday and continued their upward trend into Tuesday morning.
Drought, not geopolitics, drives wheat prices
Climatic conditions – particularly persistent drought – are currently the most influential factor in wheat price trends. Key wheat-producing regions are experiencing prolonged dry spells, with weather forecasts offering little hope of relief. This limited supply outlook is providing upward pressure on global wheat prices.
In addition, a weaker euro is offering extra support to the European wheat market, making exports from the EU more competitive on the global stage.
European wheat gains competitive edge
Western European wheat has become more attractive on the world market due to its competitive pricing. By last Friday, Ukrainian wheat was no longer cheaper than French wheat, further boosting demand for EU-origin wheat. Within the EU, feed wheat demand for French wheat has grown. Additionally, Algeria has resumed wheat imports from France following a diplomatic dispute, creating further export opportunities.
These market dynamics could lead to tighter wheat supplies across Europe, reinforcing a bullish outlook for EU wheat prices.
