Strong Russian Wheat Harvest Likely to Pressure European Exports
High exports of Russian wheat are likely to keep the pressure on prices in Europe amid strong harvests in the Black Sea region, Strategie Grains said in its monthly report.
The French consultancy forecasts European wheat production roughly flat on year at 125.6 million metric tons for 2023-24, but said that high volumes of wheat exports coming from Russia would likely mean European exports would face fierce competition on international markets.
“We forecast that French wheat prices will fall moderately as the [harvest] campaign unfolds,” said Strategie Grains. “Despite strong export sales to China, competition from Russian grains is much fiercer on other destinations–and to an even greater extent for other European exporters.”
German, Polish and Baltic grains in particular are likely to be under pressure further because of Ukrainian exports starting to gain momentum from Odessa, Strategie Grains said.
Wheat prices in Paris have been hit this year because of the strong Russian harvest, with prices down 25% so far. Futures moved as low as EUR230.75 a ton on Wednesday before trading at EUR231.50 on Thursday, a seven-week low.
Meanwhile, poor harvests in Europe are expected for both barley and corn with the past summer’s bad weather conditions straining output. Corn production is forecast at 60.6 million tons, higher on year after a weak harvest in 2022-23, while barley is forecast down on year at 47.2 million tons, both below their individual five-year averages.
Source: MarketWatch
