European wheat market: the price of wheat in France has risen, focusing on the prospect of the black sea agreement

French wheat spot prices rose in the 44th week of 2022, with the market focused on the prospects for the Black Sea agreement negotiations.

As of Thursday, the price of first-class French wheat for delivery at the port of Rouen was $340 a tonne, up $3 from a week earlier. The price range over the past 52 weeks has been $308 to $472 a tonne.

The price of second-class wheat in Argentina's Upper River on Thursday was $411 a ton, down $2 from a week earlier; Us No. 2 hard red winter wheat at $421 a tonne, down $6; Us No. 2 soft red winter wheat was at $361 a ton, down $14. On the Euronext exchange in Paris, December wheat futures, the most actively traded contract, closed at 327.25 euros a tonne on Friday, down 3.6 percent from a week earlier. Chicago wheat futures fell 4.1 per cent over the same period.

Paul Joels, an analyst at Rabobank, says that outside the Black Sea, one of the main factors affecting wheat prices is the weakness of the US dollar. For European markets, the outcome of negotiations on a Black Sea grain export corridor is awaited.

European traders are also eyeing Saudi Arabia's tender for 595,000 tonnes of wheat, with EU wheat expected to face stiff competition from Russian wheat, which is currently offering very cheap export prices because of the country's bumper crop this year. But the loss of wheat in Argentina could reduce competition for EU wheat, including in African markets.

France's soft wheat exports to outside the European Union in 2020/23 are expected to be 10 million tonnes, slightly lower than the 10.1 million tonnes forecast last month, the agriculture ministry's crop office FranceAgriMer said on November 10. French soft wheat exports in 202/23 are expected to total 17.1 million tonnes, down from last month's forecast of 17.3 million tonnes. Wheat ending stocks are expected to be 2.56 million tonnes, up from last month's forecast of 2.13 million tonnes.

On October 27, the European Commission lowered its 2020/22 EU wheat production by 1 million tonnes and slightly raised its 2020/23 wheat production forecast, leaving export forecasts unchanged.

The report showed that EU wheat production in 2021/22 was revised down to 129.07 million tonnes, down from last month's forecast of 130.13 million tonnes; Eu soft wheat production in 202/23 was revised higher to 127.19 million tonnes, up from last month's forecast of 127.04 million tonnes.

Eu soft wheat export forecasts for 202/23 are unchanged at 36 million tonnes, up from 29.25 million tonnes in 2021/22 (29.26 million tonnes forecast last month). The 202/23 EU soft wheat ending stock was reduced to 13.72 million tonnes as a result of lower beginning stocks and higher feed usage forecasts, down from 14.53 million tonnes forecast last month and 15.61 million tonnes forecast last year (16.57 million tonnes forecast last month).

On October 20th analyst Strategic Grains again raised its 2020/23 EU wheat production forecast in its monthly report, as well as its wheat export forecast. Strategic Grains expects the EU soft wheat harvest in 2020/23 (July-June) to be 125.5 million tonnes, 1.4 million tonnes higher than its September forecast but still down from 129.8 million tonnes a year earlier. With a strong export pace early in the year and an upward revision in production, the 2020/23 EU soft wheat export forecast was raised this month by 2.3 million tonnes to 31.1 million tonnes. The EU is also importing wheat from Ukraine, so EU wheat stocks are expected to remain at very comfortable levels, according to Strategic Grains.

In France, 63% of the soft wheat sown for the 2023 harvest is now under way, up from 58% at this time last year.

On Oct. 12, FranceAgriMer, the agricultural office of France's agriculture ministry, raised its 2020/23 export forecast for French soft wheat to 10.1 million tons outside the European Union, up from 10 million tons predicted last month and up 15 percent from the previous year. French wheat exports benefited from high demand during the summer as the Russian-Ukrainian conflict disrupted exports from the Black Sea. FranceAgriMer forecast French wheat exports to EU member states this year at 7.07 million tonnes, down from an earlier forecast of 7.13 million tonnes and 12 per cent lower than in 2021/22. The French soft wheat ending stock forecast for end-June 2023 is 2.13 million tonnes, down from 2.36 million tonnes expected last month, mainly due to lower production.

The average protein content of soft wheat in France this year was 11.4%, down from 11.9% in the previous five years, the agriculture ministry's agricultural office FranceAgriMer said Sept. 22. The report said wheat quality was generally very satisfactory, despite the impact of dry and hot spring and summer weather. About 59 percent of the crop was of excellent quality.

European Commission data showed wheat exports from the 27-nation European Union in 202/23 (July-June) stood at 12.52 million tonnes as of November 6, compared with 11.54 million tonnes in the previous week and 11.92 million tonnes in the same period last year. The top buyer was Algeria (1.68 million tons, or 13.4 percent). Year-to-date wheat imports were 2.48 million tonnes, compared with 2.24 million tonnes in the previous week and 960,000 tonnes in the same period last year. Ukraine was the top supplier (1.51 million tons, or 60.6%)

Wheat exports from the 27 EU countries in 2021/22 reached 27.47 million tons, a year-on-year increase of 6.84%; Imports were 2.46 million tons, up 21.49 percent year on year.

Euronext holdings data showed investment funds and financial institutions held a net long 77,320 lots in the Euronext milling wheat futures and options market as of Nov. 4, down from 71,632 lots a week earlier.

On Friday, the euro closed at $1.0362, compared with $0.996 a week ago.

Note: 1 euro is equal to $1.0362