European wheat market: Heavy rains in Europe have caused wheat prices to rise in French ports

 

On Thursday (July 22), the delivery price of first-class French wheat at the port of Rouen in France was US$252/ton, an increase of US$1/ton from a week ago
.
The price range for the past 52 weeks has ranged from US$216 to US$304 per ton
.

 

The price of second-class wheat in Shanghe, Argentina was US$277/ton, an increase of US$1 from a week ago; the price of hard red winter wheat in the United States was US$305/ton, an increase of US$11 from a week ago; the price of soft red winter wheat in the United States was US$278 /Ton, up 11 dollars from a week ago
.

 

On the Euronext exchange in Paris, France, the most active December wheat futures on Friday closed at 214.
25 euros/ton, down 1.
75 euros or 0.
81% from a week ago, while Chicago wheat futures fell 1.
23% over the same period
.

 

　　The wheat harvest in France is currently speeding up because of stormy weather in France this weekend
.
Judging from what has been harvested, yields are often disappointing, not as high as expected before the rains in June
.
But the output is still much higher than the very low level in 2020
.
On July 22, the Strategic Grain Company lowered France's 2021 soft wheat production forecast to 37 to 37.
5 million tons, which is lower than the nearly 38 million tons predicted a week ago
.
The reason for the lower output is that crop inspections showed that wheat production in the main producing areas of northern and northeastern France was lower than expected, which may be related to the cold weather at the beginning of the year
.
The overall quality of wheat is also disappointing
.
The drop value and bulk density may drop significantly
.
These two standards determine whether wheat can be used to make flour or as feed
.
But the protein content is not that worrying
.
Earlier this month, the Crop Research Institute Arvalis estimated that the average protein content of wheat was 11.
6%
.
Recently, the French Ministry of Agriculture set the forecast value of this year's soft wheat production in France at 37.
1 million tons, an increase of 27% from the 29 million tons in the previous year
.

 

　　The July Global Agricultural Production Report released by the U.
S.
Department of Agriculture on July 12 shows that wheat output in the 27 EU countries is expected to be 138.
2 million tons, which is 700,000 tons higher than the previous month’s forecast and 12.
3 million tons or 9.
73% higher than the previous year’s output.
, Which is 5% higher than the five-year average
.
The harvested area is increased by 80,000 hectares from June, which is 800,000 hectares or 4% higher than last year, but 1% lower than the five-year average; the yield per hectare is expected to be 5.
78 tons per hectare, slightly higher than the previous month’s forecast and an increase of 6 %, which is 7% higher than the five-year average
.
The low temperature and dryness in April of this year and the low temperature in May caused the growth and development of European wheat to be delayed by one to two weeks
.
But the high rainfall in May alleviated drought concerns in most parts of Europe
.

 

　　The reason for the recovery of wheat output in the EU this year is that the sown area and yield of wheat will recover from the level of the previous year due to severe weather
.
In stark contrast to the hot and dry areas of Western Canada, Europe has experienced frequent rainfall this year
.
The rains since spring have benefited the European wheat crops, but the excessive rainfall also raises concerns about the quality of wheat
.
Analysts estimate that this year's UK wheat production will increase by about 50% over the previous year, when the UK wheat crop was affected by heavy rains
.
In France, the EU's number one wheat-producing region, wheat yields are expected to be good
.
But in Romania, frequent rains in early summer may reduce wheat quality
.
The outlook for wheat production in Europe will become clearer in the coming weeks, as crop growth is generally slower than normal and harvesting in France is delayed due to rainy weather
.

 

　　FranceAgriMer, the crop office under the French Ministry of Agriculture, issued a report on July 13, predicting a substantial increase in French soft wheat exports and stocks in the 2021/22 season, as wheat production is expected to recover
.
In 2021/22, France's soft wheat exports to regions outside the EU 27 are expected to be 10.
5 million tons, an increase of 40% year-on-year; soft wheat exports to EU member states are expected to be 7.
3 million tons, an increase of 22% year-on-year
.
French soft wheat ending stocks are expected to be 3.
7 million tons, an increase of 1 million tons or nearly 39% year-on-year
.

 

　　According to data from the European Commission, as of July 18, wheat exports from the 27 EU countries in the 2021/22 season (July to June of the following year) reached 371,000 tons and imports were 80,000 tons
.
Israel is the number one destination for EU wheat exports, importing 76,000 tons, accounting for 20.
5%.
South Korea is the second with 46,000 tons, accounting for 12.
4%; the UK imports 45,000 tons, accounting for 12.
2%, and Algeria imports 30,000.
Tons (8.
0%)
.

 

　　Euronext's position data shows that as of July 16, investment funds and financial institutions held 115,392 net long orders in the Euronext milling wheat futures and options market, up from 89,805 lots a week ago
.

 

　　On Friday, the euro exchange rate was 1 euro to 1.
18 U.
S.
dollars, and 1 euro to 1.
18 U.
S.
dollars a week ago
.

 

　　Note: 1 Euro is equal to 1.
18 US dollars