French wheat at the test of the Black Sea granaries


How to get into the global wheat market when all major exporters except
Australia drought victim,

    do they have good crops? This is the challenge that France will have to meet with more than 20 million tonnes of soft wheat to export (including 11 million outside the European Union), which corresponds to 1 million tonnes per month. A challenge intimately dependent on the evolution of prices.

"Any rebound in prices will have to remain lower than world prices," warns Agritel, a company expert in different agricultural markets. For the moment, "French wheat has a better competitiveness than usual at the start of the season with the help of a fairly weak euro-dollar parity". Wheat prices on the port of Rouen have lost 15 euros per ton since June 1st.

Attention to Argentina

Monetary parities will play a key role in the competitiveness of French wheat. The appreciation of the dollar (+ 3%) on the euro is playing in the right direction. Russian and Ukrainian currencies have revalued by 5% and 10% on the dollar since the beginning of the year. French wheat therefore displays a minimal price difference for this time of year against the attics of the Black Sea. "A renewed competitiveness that will have to be confirmed in the coming weeks," emphasizes Agritel.

It must not be forgotten
Argentina, which, with a peso devalued by 30%

    and a record harvest of more than twenty million tonnes, will be a formidable competitor on the main market of predilection of France: Algeria.

"Production is the second best ever recorded by France," according to Nathan Cordier, an analyst at Agritel. It should be in the order of 39.2 million tonnes (+ 12%), with a yield of 78.15 quintals per hectare after "a disappointing crop" in 2018. Quantity and quality are at the rendezvous. An extraordinary chance, with the exception of Auvergne.

"Within a fortnight, the harvest could have been catastrophic, spoiled by the heat wave", according toMichel Portier, the general manager of Agritel. The protein level meets the requirements of most customers in Europe and elsewhere, but not in Saudi Arabia, where the type of bread requires more. Animal feed will be a good market for wheat on the Old Continent, with demand increasing by 4.5 million tonnes to 56.5 million tonnes – due to a small price differential with maize.

Forces in presence

"Competition from the Black Sea has been felt since the beginning of the campaign in July," says Michel Portier. "Russia, which has few stocks left, has made a historic harvest and has 80 million tonnes of wheat with Crimea." Same record tone in Ukraine, where "conditions were ideal". Production reached 28.2 million tonnes. In seven weeks, Ukraine exported 110% more wheat compared to the same period last year.

The quality produced in Europe "heterogeneous" offers opportunities to France, ensures the expert. All wheat combined, the Community production would be 149.7 million tonnes. "Europe is expected to export 26 million tonnes of wheat, the highest level in the past three seasons, remaining third among international exporters after Russia and the United States," according to Agritel. Spain and Portugal suffered from prolonged drought. Demand from these countries will be strong, as will that of Belgium. On the other hand, production in the Baltic countries has risen sharply, returning to normal.

United States

    they start the season with very large stocks of 29.2 million tonnes but a production of 53.9 million tonnes lower than the ten-year average (56.5 million tonnes). Unlike the United States, Canada begins the season with stocks at their lowest in a decade. He can count on "comfortable availability", considering the harvest.

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