Prices on Euronext in Paris are currently under pressure. A rejected export order for French wheat to Algeria is weighing on the market. Suppliers from Bulgaria, Romania and Ukraine have been awarded the contract instead of France, while Russia is hardly competitive on the global market due to high prices. There could also be better opportunities for European suppliers to Egypt, as Russian exporters are at a price disadvantage due to the introduction of minimum prices. The EU Commission has reduced its wheat harvest forecast for the current year by ten percent, which could also have a negative impact on yield forecasts. At the same time, sowing conditions are below expectations due to the weather conditions for winter wheat in Russia, Ukraine and parts of the EU. On the cash market, the animal feed industry is driving demand for wheat, as maize from Eastern Europe is often contaminated with aflatoxins. Despite this demand, export opportunities for wheat remain limited due to high prices and quality deficiencies. Instead of wheat, farmers are currently selling more rapeseed. Meanwhile, according to the EU Commission, the EU-27 maize harvest in 2024 is expected to amount to 58.2 million tons, which would be 3.3 million tons less than in the previous year and 8.3 million tons less than the long-term average (2019-2023). The reason for the lower harvest is very different, but mostly unfavorable, growing conditions: While it has often been too wet in the west, there has been severe drought in the east and south-east of the EU. Most of the cultivation plans were implemented for sowing, meaning that the maize cultivation area was 6.3 % larger than in the previous year at 8.8 million hectares. In the USA, the harbingers of the presidential election and a weaker US dollar led to short-term price increases for wheat. On the Chicago Board of Trade (CBoT), the December contract fell by 1.75 US cents to 571.50 US cents per bushel (194.42 €/t). In Brazil, corn exports in October totalled 6.406 million tons, which was more than 2 million tons less than in the previous year. A South Korean importer purchased 65,000 tons of corn of unknown origin overnight, whereby the USA would be considered a possible origin. Algeria has also published a tender for 240,000 tons of corn from Argentina or Brazil with a deadline for bids until Friday.
ZMP Live Expert Opinion
The European wheat market is suffering from competition from Eastern Europe, while Russia's high prices could favor European exports to Egypt. Falling EU wheat harvests and poor sowing conditions are dampening yield prospects. The maize harvest is low despite a larger area under cultivation due to unstable weather. Geopolitics and climate continue to make agricultural markets volatile.
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