Global wheat prices are rising rapidly, following a downward revision to the global 2020/21 production estimate. While global wheat production still projected at a record, continued dry conditions across Europe and the Black Sea have caused lower yield concerns in most of the major wheat producing countries. As a result, as of 17th July, wheat prices on the Chicago Board of Trade (CBOT) were $203.41/MT, up 2.7% w-o-w and 12% m-o-m.
Meanwhile, US maize (corn) prices fell to $131.46/MT on 17th July from the almost 4-month high recorded on 1st July at $141.85/MT, reflecting weaker oil prices and lower demand for maize-derived ethanol. Maize prices rose during June due to concerns about arid weather across the US corn belt and a smaller-than-expected US planted area estimate released by the USDA in June. However, with the number of COVID-19 cases surging in the US and crude oil prices dropping recently, the market sentiment was weighed down by a potential slowdown in fuel demand.
Tight rice availability due to arguably the worst drought in decades and stronger currency underpinned Thai rice prices during June. Although, market participants report a slight drop in prices in July due to currency fluctuations. Meanwhile, Indian rice prices were supported by a slight increase in foreign demand, rising by 4% to $385/MT on the two-weeks to 8th July. However, logistical issues caused by the pandemic continued to hamper trade. The Bihar government (northern Indian state), has decided on a fifteen-day lockdown from 16th July to 31th July, to combat COVID-19, joining states and cities around the globe that have reintroduced restrictions in recent days. This is likely to further impact rice logistics, potentially resulting in a bottleneck in supply, thus pressuring domestic rice prices.