French crop conditions dip amid dry weather: Grain Market Daily

Market Commentary

• US wheat prices fell yesterday on continuing demand worries due to the coronavirus pandemic. US wheat lost out again as Egypt’s state buyer, GASC, bought 240Kt of French and Russian wheat in its latest tender. Chicago wheat futures (May-20) fell $3.86/t to close at $194.65/t.
• UK wheat futures followed the US lower but to a lesser extent as sterling declined against the US dollar. The May-20 and Nov-20 contracts both fell £1.50/t yesterday, closing at £151.00/t and £163.50/t, respectively.
• In contrast, Paris wheat futures May-20 gained €1.75/t yesterday after GASC bought French wheat and the euro fell against the US dollar.
• Paris rapeseed futures also gained, with the May-20 contract up €2.00/t to €371.00/t.

French crop conditions dip amid dry weather

French crop conditions have declined over the past week as rainfall in the country remains below average.

The largest fall in condition rating was for spring barley.  In the week ending 13 April, 78% of the crop was rated as in a ‘good’ or ‘very good’ condition, down from 84% the previous week. This is the lowest good / very good spring barley rating for mid-April since 2014.

Despite planting delays, the development of the spring barley crop is now in line with average.

Soft wheat and winter barley conditions also dipped, with the proportion rated 'good' or 'very good' declining 1% each. These crops got off to a poor start due to water-logged soils last autumn. The latest declines mean soft wheat crops are now in the poorest conditions for mid-April since FranceAgriMer started reporting in 2011 and since 2012 for winter barley.

Showers are forecast for the week ahead, which could bring some relief. However, projections from the European Centre for Medium-Range Weather Forecasts indicate a drier than normal May.

Continued adverse weather conditions would negatively impact yield potential for French crops. The wheat area is down 8% on last year due to the wet autumn preventing planting, while the spring barley area is up 9% according to the French government. 

European wheat and barley prices have fallen in recent weeks due to lower demand because of the coronavirus pandemic. Yesterday, Stratégie Grains increased its forecasts for EU carry out stocks of both grains as a result of lower demand.

If weather remains unfavourable to yield potential, it could mean smaller than expected crops for Europe’s top producer and mean these stocks weigh less heavily on prices. However, while French crop conditions need to be monitored in the weeks ahead, for now prices are reacting to factors arising from the rapidly changing pandemic situation.

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