Europe: Politics and Weather Add Value

New crop feed wheat values are once again improved this week as this year’s Northern Hemisphere grain harvest gets underway.

Although I am again cautious with pinpointing specific values, £125.00/T ex-farm for feed wheat should be a realistic offer for August/September collection.

Europe appears to be at the forefront of trade concerns at the minute; a hot and dry weather forecast for the week ahead could stress several both spring and winter planted crops.

The French weather is a particular cause for concern at the minute with temperatures expected to soar to 40+ degrees by the end of the week – a 10 degree increase on average temperatures for the time of year. Around 5% of the French winter barley crop has now been harvested and ‘twitter based reports’ are encouraging; we should have some more reliable sources of information by the end of next week!

The French Agricultural Ministry have so far made very small changes to crop expectations and still claim that 80% of this year’s winter wheat crop is in either a ‘good or very good’ condition. This figure will certainly be one to watch over the coming few weeks – any reductions as they head into harvest could certainly cause a stir within the European grain market.

Elsewhere, German soft wheat production has been forecast at 25 million tonnes this week by the local agricultural ministry there, a 10% reduction on their initial estimates. Expectations for this year’s OSR crop have also been reduced; 5 million tonnes is their latest estimate, a 19% decrease on initial forecasts. This is greatly benefitting new crop European OSR values. 

Here in the UK, the HGCA have commented that ‘some cereal crops on lighter land are starting to show visual symptoms of moisture stress’ and are therefore expecting this week’s heat wave to bring a mixed response. Either way I think it’s safe to say that a good rain over the weekend would prove beneficial to many crops in our area. 

Meanwhile, the weather isn’t the only concern regarding Europe at the minute and the on-going talks regarding the future of Greece are continuing to drive the market. The pound rose to 1.43 against the euro earlier in the week, a level we haven’t seen since early 2007. The situation is proving beneficial to the Paris wheat market, particularly given the local heat wave, but appears to be capping the potential of the recent weather-induced rally within the UK wheat market.



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