European wheat market: French wheat harvest advances rapidly, prices fall! For more information on export to China, please call SINOLOBEN, service Email: email@example.com 90% sold to China.
July 10: French wheat spot prices continued to dip in the 26th week of 2022, mainly due to seasonal pressure from the wheat harvest.
On Thursday (July 7), the delivered price of first-class French wheat at the port of Rouen, France, was $357 per tonne, down $25 from a week earlier. The price range for the past 52 weeks has been $240 to $472 per ton.
Thursday's price for second-class wheat in Argentina's Upper River was $433 per ton, down $27 from a week ago; U.S. No. 2 hard red winter wheat was $388 per ton, down $21 from a week ago; and U.S. No. 2 soft red winter wheat was $337 per ton, down $12 from a week ago.
At Euronext Paris, the most actively traded December wheat futures closed at 345 euros per ton on Friday, up 16.75 euros or 5.10 percent from a week ago, having fallen to a four-month low on Thursday; Chicago wheat futures rose 5.38 percent over the same period.
In France, the wheat market, which is usually very quiet in July, became unusually busy as the wheat harvest began early. Major buyers such as Algeria and Morocco have little choice but to purchase French wheat.
The current progress of the French wheat harvest is much higher than the same period last year. As of Monday, the national wheat harvest was 14% complete, well above the 1% of the same period last year, which was due to the hot and dry weather in late spring this year, so the harvest started earlier. Early harvest results show satisfactory wheat quality.
With wheat prices falling, international buyers are actively purchasing. Traders said that on Monday the number one wheat importer, Egypt's state-owned buyer - General Authority for Commodity Supply (GASC) directly from traders to purchase 444,000 tons of wheat, and on Tuesday bought 63,000 tons of German wheat. In addition, Morocco's drought led to a reduction in wheat production and strong import demand, which may prompt Morocco to import several hundred thousand tons of wheat from France this month.
The monthly report released by the European Commission on July 1 showed that the available production of soft wheat in the EU in 2022/23 (July-June) was 125.04 million tons, lower than last month's forecast of 130.39 million tons and lower than the previous year's 130.14 million tons, mainly because of the reduction in wheat production in France, Poland, Romania and Spain. However, the Black Sea grain exports were hampered to boost the outlook for EU wheat exports. The EU left unchanged its forecast of 38 million tons of EU soft wheat exports in 2022/23, which would be a record export volume, well above the 30 million tons in 2021/22. The downward revision in production resulted in a lower ending stocks title for 2022/23 of 4 million tons to 13.2 million tons.
By way of comparison, Strategic Grains on June 9 forecast EU soft wheat production for 2022/23 at 124.4 million tons, compared with a May 27 forecast by the European Union Chamber of Grains (COCERAL) of 127.4 million tons.
The French Ministry of Agriculture released its first 2022 crop production report on June 8, projecting higher production of winter barley and rapeseed this year, but giving no forecast for wheat production. France usually starts harvesting wheat in July. The French wheat crop recently declined for six consecutive weeks, but with the recent rains and cooling, the rate of decline in crop conditions narrowed in the last two weeks. The market is concerned whether the recent rains can contain the damage caused by the spring drought and avoid further loss of yield potential. France saw more rainfall on Wednesday.
On the demand side, importers have balked at high wheat prices in recent weeks, with international demand slumping and traders increasingly looking forward to the next year, which begins in July. However, traders say there could be a wave of new demand from drought-hit Morocco, and France is expected to ship wheat to Morocco in the coming weeks.
France's Agriculture Office (FranceAgriMer) under the Ministry of Agriculture on June 9 estimated France's wheat exports to outside the EU for 2021/22 (July-June) at 9.1 million tons, down from the 9.25 million tons forecast in May and the third consecutive monthly downward revision. FranceAgriMer expects French wheat exports to EU member states to be 8 million tons in 2021/22, unchanged from the May forecast.
European Commission data show that as of June 30, 2021/22 (July to June) EU-27 wheat exports reached 27.47 million tons, up 6.84% from the previous year's 25.71 million tons; imports were 2.46 million tons, up 21.49% from the previous year's 2.02 million tons. The top buyer was Algeria, which imported 4.9 million tons of wheat, compared with 5.82 million tons in the previous year; its share was 17.8, compared with 22.6% in the previous year. The second largest buyer was Egypt, importing 2.73 million tons, compared with 1.08 million tons in the previous year); the share was 9.9%, compared with 4.2% in the previous year. The third largest buyer is Nigeria, imports 2.24 million tons, 2.36 million tons in the previous year); import share of 8.1%, 9.2% in the same period last year; China is the fourth largest buyer, imports 2.13 million tons, 1.77 million tons in the previous year), share of 7.8%, 6.9% in the previous year.
Euronext position data show that as of July 1, investment funds as well as financial institutions in the Euronext milling wheat futures and options market held a net long 102,956 lots, down from 120,385 lots a week ago.
On Friday, the euro exchange rate closed at 1 euro to 1.02 U.S. dollars, compared with 1 euro to 1.04 U.S. dollars a week ago.
Note: 1 euro equals 1.02 U.S. dollars
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