A New French President
Posted by Anderson Grain Marketing on May 8, 2017 in AGM News | 0 comments
Last week was another week of weather watching, monitoring currency movements and hoping for rain. Many local growers, particularly those on lighter land are becoming increasingly concerned for crops ahead of yet another dry week. Some areas may catch a few showers towards the weekend but for most it is set to remain largely dry.
Old crop feed wheat for spot collection is currently being valued just short of £150.00/T ex-farm – please contact the office to discuss your requirements. With two Bank Holidays and consequently two four-day weeks this month, movement is slow and end-user demand is quiet. Trade rumours would suggest that there is a large vessel of maize making its way up to Teeside to keep them ticking over until the combines start rolling.
New crop feed wheat should make £135.00/T ex-farm for as available collection at harvest whilst movement before the end of the year should make £140.00/T ex-farm.
It has this morning been announced that centrist candidate Emmanuel Macron has been elected as the new French President with 66.1% of the vote after defeating the far right’s Marine Le Pen. Macron was elected on a pro-European platform whilst Le Pen threatened to pull out of the single currency and hold an in/out referendum on France’s membership of the EU.
In opening trade this morning, the Paris wheat futures have opened marginally lower.
What could this mean for Brexit?
According to the BBC, “the receive wisdom is that the election of Emmanuel Macron as French President is negative for Britain’s Brexit negotiations”. However they have also added that it may be incorrect and that the result could in fact “make a deal between Britain and the European Union easier”.
On the one hand, President Macron is a devoted pro-European financier turned politician. He has been shameless in his ambition to “lure French workers and money back to France”, he has spoken of reforming the borders in Calais and he has made it “utterly clear that the wants Britain to pay top whack when it exits the EU.
On the other hand however, the new President will likely be preoccupied gaining support for this own proposals to reform both the EU and the Eurozone within a post Brexit Europe. When he does eventually focus on Brexit, he will naturally be tough on Britain but that is the current position of the French government anyway. The election of Macron represents continuity and provides more stability as the UK moves forward with Brexit – “the electoral failures of anti-establishment politicians in Austria, the Netherlands and now France will give the rest of Europe hope that the troubled EU project is not quite so threated as initially imagine; a less vulnerable EU may feel less determined to make an example of Britain in the negotiations, and this can only be a good thing for Brexit. The election of Macron will of course send shivers of relief through the corridors of Brussels – but it won’t make the challenge of Brexit any more enormous than it already is”.
To read the BBC’s report in full, please see: http://www.bbc.co.uk/news/uk-politics-39842424
Meanwhile, the latest French crop condition scores (from FranceAgriMer) have revealed another drop in the quality of the developing soft wheat crop. For the week ending 1st May, 75% of the soft wheat crop was described as being in a “good/very good” condition compared with 78% a week earlier. Furthermore, it is worth noting that the current condition score is lower than equivalent ratings in 2016 and 2015.
Although this may seem premature – it isn’t when you also consider that the recent dry spell is set to continue for at least another ten days or so. The current estimate for French soft wheat output in 2017/18 by Strategie Grains is 37.4 million tonne – this is a 9.5 million tonne increase on last year’s disastrous crop. With a big crop forecast and dry weather threatening the condition of winter crops, this will certainly be worth watching over the coming few weeks.
Last week’s panic regarding snowfall over in the US appears to have quite literally dissipated; any snowfall has now melted and the trade appears to have forgotten all about it. However, the slight boost given to the market at the beginning of last week has remained, supported by the ongoing political uncertainty in Europe.
The extent of the damage done is yet to be assessed as further low temperatures are continuing to slow development.