European wheat markets: The euro hit a one-year high and French wheat fell

In the 15th week of 2023, spot prices of French wheat fell for the second week in a row. The euro rose to a one-year high against the dollar, making European wheat exports less competitive. The market continues to focus on the Black Sea grain export situation.

As of Thursday, the price of first-class French wheat for delivery at Rouen port was $279 a ton, down $6 from a week ago. The price range over the past 52 weeks has been $277 to $472 a tonne. Second class wheat in Rio de Janeiro, Argentina, was $349 a ton, up $3; Us No. 2 hard red winter wheat at $375 / ton, down $11; U.S. soft red winter wheat No. 2 was at $282 a ton, down $4.

On Friday, the most actively traded July wheat futures on the Euronext exchange in Paris closed at 250.5 euros a tonne, down 0.4 percent from a week earlier. Wheat futures in Chicago are up 0.7 per cent.

Eu wheat supply and demand data released by the US Department of Agriculture on April 11th were generally negative as exports were revised down, imports revised up and ending stocks revised up. Eu wheat production for 202/23 was revised down to 134.34 million tonnes, down from the March forecast of 134.7 million tonnes and from 138.24 million tonnes the previous year; Exports were 35m tonnes, down from 37m tonnes forecast last month and 32m tonnes a year earlier; Imports of 10.5 million tonnes, up from last month's forecast of 9 million tonnes and 4.63 million tonnes a year earlier; Ending inventories were 12.16 million tonnes, up from 11.06 million tonnes forecast last month and 13.32 million tonnes a year earlier.

On April 13, the French agricultural agency (FranceAgriMer) cut its 2020/23 soft wheat export forecast for third countries to 10.4 million tonnes, slightly lower than the 10.45 million tonnes forecast in March and 10.6 million tonnes forecast in January, mainly because of competition from the Black Sea region. France's soft wheat export forecast for 2020/23 to EU countries was also lowered to 6.43 million tonnes, down from the previous forecast of 6.51 million tonnes and 19.7 percent lower than 2020/22. Ending stocks are expected to be 2.61 million tonnes, up from the previous forecast of 2.5 million tonnes, but still 6% lower than 2021/22 ending stocks. The decline in export and domestic feed use more than offset the decline in imports, the report said.

On April 13, Strategic Grains forecast a 2023/24 EU27 soft wheat crop of 128.9 million tonnes, down from its March forecast of 129.5 million tonnes due to a cut in Spanish production, but still 3.0% higher than 125.1 million tonnes in 2022/23. Hungary, France, Romania and Bulgaria increased their acreage and yield per unit area. Strategic Grains has raised its 2023/24 EU soft wheat export forecast to 30.7 million tonnes, up 400,000 tonnes from earlier estimates; It also lowered exports by 600,000 tonnes to 29.4 million tonnes in 2022/23. Strategic Grains expects average EU wheat prices in 2023/24 to be lower than in 2020/23.

On 30 March, the European Commission left the EU wheat production and export forecast unchanged, with EU27 wheat exports (to third countries) forecast at 32 million tonnes in 2022/23 (29.255 million tonnes last year); Eu wheat production is estimated at 125.96 million tonnes (129.08 million tonnes last year). Eu wheat feed consumption remained at 43 million tonnes (39.8 million tonnes in the previous year). The commission also raised wheat imports for the 27-nation European Union by 1m tonnes to 7.5m tonnes, up from 2.82m a year earlier. Ending inventories are expected to be 18.111 million tonnes, up from the 17.107 million tonnes forecast in February and 17.5% higher than the 15.411 million tonnes in the previous year. The Commission also forecast that EU soft wheat production in 2023/24 would rise to 130.9 million tonnes, up 3.9% from a year earlier and 5.3% above the five-year average. Soft wheat acreage was estimated at 22 million acres, up 0.4% from last year.

Grain trade data from the European Commission showed wheat exports across the 27-nation European Union in 2020/23 (July-June) were about 23.83 million tonnes as of April 9, up 8 percent from 23.15 million tonnes a week earlier. The top buyer was Morocco (3.65 million tons, or 15.3 percent). Wheat imports into the EU so far this year were 7 million tonnes, last week 6.92 million tonnes, 233% higher than the same period last year, of which 4.48 million tonnes (64.0%) came from Ukraine. Wheat exports from the 27 EU countries in 2021/22 were 27.47 million tons, up 6.8% year on year; Imports reached 2.46 million tons, up 21.5% year on year.

At the port of Rouen, France's top wheat export port, 60,922 tons of wheat were exported in the week ending April 11, up from 57,988 tons the previous week, port operator Haropa said. Another 35,151 tons of barley were exported during the week.

Investment funds and financial institutions held 51,647 lots of net short orders in the Euronext wheat futures and options market as of April 6, down from 49,477 lots in the previous week.

On Friday, the euro traded at $1.0995, after briefly hitting a one-year high of $1.1075, compared with $1.0967 a week ago.

Note: 1 euro is equal to $1.0995