On Monday, July 29, the wheat price on the Matif in Paris recovered slightly. In the past week there were mainly lower prices on the boards. The European harvest may be disappointing, but the large supply at low prices from Russia means that EU countries are being sidelined.
FranceAgriMer lowered the country's wheat rating to 50% good to excellent at the end of last week. Last year that percentage was still 78%. French arable farmers have had a good week. More than 40% of all wheat had been harvested before the weekend. This means that it is behind last year's pace.
French exports are not going well
Things are also not going as smoothly as they should in exports. The new export season – which started on July 1 – shows a third fewer tonnes than last year. This is partly due to missing figures from France, but it is clear that the EU cannot compete with Russia's aggressive export position. Ukraine is also trying to ship as much grain as possible, as far as possible.
In France, exporters expressed their concerns about the situation. In a recent tender round, companies were not able to compete in prices and it now looks like there is less interest from China to buy French wheat. The orders remain at a few shiploads of barley.
Figures subordinate
Due to the heavy rainfall this season, more wheat is being used for animal feed and less is available as baking and milling wheat. The French government estimated the harvest at 29,7 million tons of wheat, which is 15% less than was harvested in 2023. Forecasts now range from 26 to 28 million tons, but with a lack of export orders, those figures are suddenly less relevant. At $210 to $211 per ton FOB, Russian wheat (11,5% protein) is simply the (much) cheaper option.
Wheat restores light
Nevertheless, Euronext in Paris showed some recovery on Monday. On Monday afternoon, the September contract is trading at around €217,50. Equal to – or slightly higher – than Friday's close. The price of corn continues to decline and loses about €2 on the August contract on Monday afternoon. Drought is not yet a factor in Western Europe. This is different in Central and Eastern Europe. Persistent heat and drought cost kilos for grain maize and sunflowers.
In Chicago, corn and soy are both trading lower, despite drier weather emerging in the western cornbelt. The chance of thunderstorms helps analysts believe that growing conditions will remain excellent. Here too, it is wheat that posted a small plus on Monday. US wheat is offered at a price $25 FOB below the French price level, increasing the likelihood that European and British companies will import wheat from the US to compensate for the lack of baking wheat in the EU. That causes a small revival.