Wheat prices in Chicago and Paris rise to multi-month highs

The International Grains Council's decision on Thursday to reduce the expected figure for the global crop in 2015/16 is likely to have driven up the price of wheat, as no doubt have the unfavourable weather forecasts for the current week. 

Many key regions in the US are set to remain too wet, while dry and hot weather is predicted for the EU and Canada. This will exacerbate the problems that are already manifesting themselves there as a result of the prolonged dry spell. 

Canada is reporting delays in grain development, while the proportion of wheat plants in good or excellent condition fell by 4 percentage points in the last reporting week in France, the biggest EU wheat producer, after having already decreased by 2 points in the week before. 

The European grain traders' association Coceral now expects the EU soft wheat crop to total just 140.6 million tons, after 148.3 million tons in 2014, says Commerzbank.

At the same time, estimates from Australia indicate that the Australian crop in 2015/16 could drop to an eight-year low because of the El Niño weather phenomenon.