After a surge in prices over the last few weeks traders are wondering if markets have reached a level where demand could slow down. Last week Egypt cancelled a wheat tender - suspected to be direct relation to current prices.
The Russian authorities decided Friday on a further action about export taxes on cereals. As a result, within the framework of the 17.5 Mt quota of cereals exportable between 15 February and 30 June, the following taxes will be applied:
- From 15 February: 25 €/t in wheat as announced in mid-December.
- From 1 March to 30 June: 50 €/t in wheat.
- From 15 March to 30 June: 25 €/t in corn and 10 €/t in barley.
In corn, planting conditions in Brazil, which contributes just over 100 million tonnes to world production, will need to be closely monitored. The most important factor disrupting global balances is the demand side, with China's appetite for both maize and soybean.