EU soft wheat production is expected to fall further than initially expected as the French crop is showing signs it could be much worse than originally thought. After a very wet season across France, that hindered all phases of crop development, from sowing to harvest, the projection is for lower volume and quality. This will result in both a draw down on ending stocks and also a reduction of French soft wheat exports out of the EU. Officials in France have estimated exports to non EU countries may fall from 10.2mt last year to 7.5mt in the coming year. Ending stocks are also likely to fall 830kt to just 3mt. The report went on the state that further reductions are not being ruled out.
This news comes ahead of the USDA WASDE report due out tonight.
European Union Copa-Cogeca farming association is expecting to see a reduction in total EU wheat output regardless of the improvements year on year in countries like Spain. Total soft wheat production is expected to be around 117.5mt according to the association, 8mt lower than last year. The fall in production isn’t limited to wheat, barley production is expected to decline 9% to 43mt, the smallest EU crop in one hundred years according to some. Rapeseed is expected to be back 8% to 18.2mt, hence the active import program for Canadian canola.
This news, and further speculation of declining yields in Russia as their wheat harvest moves north, helped both EU wheat futures and Chicago wheat futures stage a slight recovery. Paris milling wheat gained roughly AUD$3.61 and Chicago put on roughly AUD$5.84, the higher AUD paring back a possible 80c/t of that gain.
Paris rapeseed futures were less buoyed by the news, shedding €1.50 in the Feb slot, ignoring moves higher in both Winnipeg canola and Chicago soybeans. The trade expect to see reductions in both Argie and Brazilian soybean crops in this months WASDE against the USDA June estimates. The new numbers, if lower, may support current values but are still big numbers. The bad news is their 24/25 numbers are even bigger.