France extended its strong start to 2022-23 for export orders with another purchase by Gasc, even as one of the country’s largest grain co-operatives flagged the strong quality of this year’s crop.
Gasc, the Egyptian grain authority, reportedly turned to France for 360,000 tonnes of a 640,000-tonne wheat order, agreed through direct negotiations with traders rather than the tenders it has usually employed.
The deals took to 880,000 tonnes the volume of wheat that Gasc has ordered from France for delivery in 2022-23, as started this month – more than it typically orders from this origin in a whole season.
However, access to supplies from the Black Sea origins that Gasc normally turns to early in the season has been hampered by the Ukraine war, and the political clouds over Russia, which has also seen the competitiveness of its offerings tested by a strong rouble and export tax.
Paris wheat futures for September were helped 3.1% higher to E350.75 a tonne on the news, with the best-traded December lot adding 2.4% to E335.25 a tonne.
“These new sales are reassuring,” said France-based consultancy Agritel, noting the tailwind to eurozone exports from weakness in the euro, which last week fell below parity with the dollar for the first time in nearly 20 years.
The Gasc order also backs optimism by FranceAgriMer over the potential for French soft wheat exports, with the official ag bureau last week forecasting shipments outside the EU in 2022-23 at 10.3m tonnes, up by 1.5m tonnes year on year.
Hopes are being buoyed by – besides the dent to Black Sea supplies stemming from the disruption and sanctions prompted by the Ukraine war – drought expected to boost imports by Morocco, a key French wheat customer.
‘Large differences in yield’
One question mark over whether France will be able to raise total soft wheat shipments by 550,000 tonnes to 17.4m tonne in 2022-23, including exports to other EU member states, has been whether it will have sufficient supplies.
The FranceAgriMer forecasts factored in a soft wheat stocks drawdown of nearly 1.0m tonnes, to a pipeline 2.34m tonnes, to bolster supplies – given the expectation of a harvest of 32.9m tonnes, down by 2.5m tonnes year on year thanks to crop damage from drought and heat.
Strategie Grains last week estimated this year’s French soft wheat yield at 6.95 tonnes per hectare, down from 7.12 tonnes per hectare last year, with the worst results expected from the south of the country, which has suffered the worst of the weather extremes.
Meanwhile, grains co-operative Axereal on Thursday reported “large differences in yield… from one farm to another” from its harvest of winter grains, including a range of 4.0-10.0 tonnes per hectare for soft wheat.
However, it reported that overall, “average yields are within the Olympic average”, which is calculated after discarding the outlying high and low results.
Axereal also said that the results of the harvest, which was close to completion, “generally show very good quality, in line with the expectations of customers”, with soft wheat protein levels at a “satisfactory” 11.9%.
The co-operative reported “above-average” durum yields, ranged between 5.0-8.5 tonnes per hectare, barley yields of 6.5-8.5 tonnes per hectare, and rapeseed result of 3.0-5.0 tonnes per hectare.
It also said that the harvest of autumn-reaped crops, such as sunflowers, would begin “almost a month” early, with the first deliveries expected by the end of next month.
“This situation is unprecedented,” said Vincent Graffin, the Axereal collection and marketing director.
It will stoke concerns of crops, including corn, being forced into early maturity by France’s hot and dry spring and summer, and losing yield potential.
Gasc’s order also reportedly included 30,000 tonnes apiece of German and Lithuanian wheat, with the balance of 240,000 tonnes bought from Russia.
EU origins account for 1.6m tonnes, more than two-thirds, of the wheat that Gasc has bought this season through tender or direct negotiation, with the remaining 780,000 sourced from Russia.
The European Commission on Wednesday reported EU soft wheat exports at 363,944 tonnes for the first 10 days of July, which count as weeks one and two of 2022-23 on its terminology.
The EU exported 293,597 tonnes of wheat in weeks one and two of 2021-22.