EU wheat subsidies may hit us wheat exports

Introduction: U.S grain traders said that Europe decided last week to resume subsidizing wheat exports 18 months after it stopped subsidizing wheat exports, which may steal the U.S wheat sales business Moreover, the market share of Argentine wheat, which is famous for its low price, will also be limited Traders said the extent of the damage to us wheat exports depends on the level of EU subsidies, and if it is only 3 to 4 euros (4 to 5 US dollars) per ton, it is unlikely to have a serious impact According to Charles sinatinger, an analyst at O'Connor, the most important thing is the level of subsidies From a market perspective alone, it has long been expected that subsidies may be restored in Europe, so this news is not unexpected If the subsidy is only 3 to 4 euros per ton, it is not a problem, but if it reaches 10 to 12 euros per ton, then there will be a price war between Europe and the United States Traders said that if there was a price war, it would be between France, the United States and Argentina France is the number one wheat exporter in Europe, the United States is the number one wheat exporter in the world, and Argentina is one of the five largest wheat exporters in the world Those destined to benefit are wheat buyers, especially in Mediterranean countries such as Morocco, Algeria, Tunisia and Egypt Egypt has always been the number one buyer of wheat in the United States, but now it is not In recent months, Egypt has purchased more cheap wheat from Argentina Over the weekend, Egypt's official general merchandise supply bureau (GASC) bought 295000 tons of wheat, only 60000 tons from the United States, the rest from Argentina and France Traders said that the price of American soft red winter wheat was the same as that of French flour soft wheat, with an FOB price of $140 per ton, but if the EU provided subsidies, French wheat would certainly have a better price advantage than American wheat The U.S Department of Agriculture reported in January that this year's soft red winter wheat acreage is expected to be 6.6 million acres, down from 8.3 million in 2004 Another trader said sales of soft white winter wheat in the US would also be hurt by European subsidies, while a large number of US wheat purchased in Egypt was soft white winter wheat Traders added that the biggest impact of EU subsidies on US wheat was soft red winter red and soft white winter In addition, because the freight from the United States to Mediterranean countries is higher than that from Europe, the higher freight is often not conducive to the sale of wheat in the United States.