The high grain price is good news for arable farmers. However, the feed manufacturers and livestock farmers prefer to see things differently. That high price also changes the world market. Can the countries with expensive wheat still benefit from a high level of exports?
The wheat contract on the Matif in Paris (September) rose on Monday, July 23, to a closing price of €193 per tonne. However, he stops on Tuesday, July 24, after which the contract is quoted at around €191 per tonne. The downside is that European wheat (at such price levels) is priced out of the market globally; especially in combination with an unfavorable exchange rate for the euro.
The French market agency Agritel expects that the French wheat exports for the 2018/2019 season will amount to 34,2 million tonnes. While this amounted to 2017 million tons in the 2018/36,6 season. This would make the 2018/2019 season the third lowest in 10 years.
Export engine
Meanwhile, the Russian export engine continues to run at full speed, with an estimated export level of 3 million tons of wheat (as of July). That would be a new record. The early and rapid wheat harvest contributed to this.
In the United States (US), 80% of the winter wheat harvested and 80% of the spring wheat is there good on. However, wheat exports are still almost 45% behind last season. This is mainly due to stiff competition from other countries.
South America
Argentina is expected to harvest a record amount of 20 million tons of wheat this year, compared to 18,2 million tons last year. This allows the country to become an important exporter on the world market; especially because Australia expects a significantly lower harvest.