European wheat market week focus:French wheat prices continue to fall
By: Date: 2022-07-18 Categories: Internationalfood Tags: ,

On Thursday (July 14), the delivery price of first-class French wheat at the French port of Rouen was $353/ton, down $4 from a week ago. The price range over the past 52 weeks has ranged from $250 to $472 per ton.
On Thursday, the price of second-class wheat on the river in Argentina was 428 yuan/ton, down $5 from a week ago; The price of No.2 hard red winter wheat in the United States was $372/ton, down $16 from a week ago; The price of No. 2 soft red winter wheat in the United States was $325/ton, down $12 from a week ago.
At Euronext in Paris, December wheat futures, the most actively traded on Friday, closed at 316.75 euros/ton, down 28.25 euros or 8.19%from a week ago; Chicago wheat futures fell 12.87%in the same period.
At present, the progress of French wheat harvest is much higher than that of the same period last year. As of Monday, 50%of the wheat harvest had been completed, compared with 3%in the same period last year. Early harvest results showed that the quality of wheat was satisfactory.
On Wednesday, Russia, Ukraine, Turkey and the United Nations held quadrilateral talks in the Turkish capital. After the meeting, the negotiating parties said that they were expected to sign an agreement to resume Ukraine’s Black Sea grain exports next week. However, even if an agreement is reached to open its seaport, it will still take time to restore infrastructure, so it will not necessarily have a significant impact on exports this year.
On July 13, the official website of the franceagrimer under the French Ministry of Agriculture released the first supply and demand forecast report for 2022/23 (July to June). It is expected that in 2022/23, France’s wheat exports to countries outside the European Union will reach 10.3 million tons, an increase of 17%over the 8.8 million tons reduced last year, the highest since 2019/20. The export of Ukraine was blocked, while the drought in Morocco led to an increase in import demand, driving the growth of French wheat export demand at the beginning of the year. Although there are still uncertainties in China’s demand and Russia’s exports, French wheat prices are competitive because the euro exchange rate has fallen to almost parity with the US dollar, which helps boost the prospects for French wheat exports. In terms of old season wheat, franceagrimer lowered the wheat export volume of France to non EU countries in 2021/22, lower than the estimated 9.1 million tons in June, which is also the fourth consecutive month of lowering export expectations.
On July 14, the French strategic grain company reduced the EU wheat production in 2022/23 to 123.3 million tons, lower than the expected 124.4 million tons in June and 129.9 million tons in the previous year. In contrast, the US Department of agriculture lowered the expected value of all wheat production in the EU by 2million tons to 134.1 million tons in its monthly supply and demand report on July 12, also lower than 138.42 million tons in the previous year. Last week, the survey results of 13 analysts showed that the soft wheat production of 27 EU countries will reach 125.7 million tons in 2022/23, a decrease of 3.4%over the previous year.
According to the monthly report released by the European Commission on July 1, the available output of soft wheat in the EU in 2022/23 (July to June) was 125.044 million tons, lower than the forecast of 130.39 million tons last month and 130.14 million tons last year, mainly due to the reduction of wheat production in France, Poland, Romania and Spain. However, the blocked Black Sea grain exports boosted the prospects for EU wheat exports. The EU maintains the forecast value of 38million tons of soft wheat exports in 2022/23, which will be a record export volume, far higher than the 30million tons in 2021/22. The decrease in output led to a decrease of 4million tons to 13.2 million tons at the end of 2022/23.
According to the data of the European Commission, the wheat export volume of the 27 EU countries reached 27.47 million tons in 2021/22 (July to next June), an increase of 6.84%over the previous year’s 25.71 million tons; The import volume was 2.46 million tons, an increase of 21.49%over the previous year’s 2.02 million tons. The number one buyer is Algeria, which imported 4.9 million tons of wheat, up from 5.82 million tons last year; The share was 17.8, up from 22.6%in the previous year. The second largest buyer is Egypt, with imports of 2.73 million tons, up from 1.08 million tons last year); The share was 9.9%, up from 4.2%in the previous year. The third largest buyer is Nigeria, with imports of 2.24 million tons, up from 2.36 million tons in the previous year); The import share was 8.1%, 9.2%in the same period last year; China is the fourth largest buyer, with imports of 2.13 million tons (1.77 million tons in the previous year), accounting for 7.8%and 6.9%of the previous year.
Euronext position data showed that as of July 8, investment funds and financial institutions held 97045 net excess orders in the Euronext flour wheat futures and options market, down from 102956 a week ago.
On Friday, the exchange rate of the euro closed at 1.01 US dollars, up from 1.02 US dollars a week ago.
Note:1 euro equals 1.01 US dollars