Wheat prices fell in Europe today, due to fears that the import ban imposed by Turkey will lead to a decline in global demand, but the decline in the euro limited the losses.
Today, September flour wheat contracts on the Paris-based Euronext Stock Exchange fell 1% to 241.25 euros ($259.08) per ton.
Türkiye ban
Turkey will partially stop wheat imports, starting June 21, to protect its farmers. It is the fifth largest wheat importer in the world, most of which it buys from Russia.
“Russia will have to sell the wheat, which was expected to go to Turkey, in other markets… and this will lead to more export competition for the European Union,” a German trader said.
European exports may benefit from the sharp decline in the euro after the gains made by the far right in the European Parliament elections, yesterday, Sunday, prompted French President Emmanuel Macron to call for early national elections.
“The dissolution of the National Assembly (parliament) in France, which was not expected, is causing turmoil in the markets,” a trader said. “Ultimately, the euro’s decline is good news for exporters.”
Drought
Analysts said that rainfall could limit the effects of drought in the Black Sea region, which has been affected by recent droughts, but the timing may have been delayed, and crops will not benefit from the rain.
Traders said that the supply of barley crop in Spain is underway, which will reduce demand for feed grain imports.
In Poland, a trader said, “Polish manufacturing companies were able to purchase large quantities of feed and flour grains during the period of declining prices during the past two weeks, and (the companies) are looking forward to the new crop being abundant.”
Russian wheat
In the same context, Russian wheat export prices ended 6 weeks of gains, falling last week along with global markets after Turkey’s decision to ban wheat imports until mid-October.
The price of Russian wheat, which contains a protein of 12.5%, and is scheduled for delivery in late June on a ship-on-board basis, reached $242 per ton, ending the week down $6, according to the consulting company “EKAR”.
Soficon Agricultural Consulting Company set the price of wheat of the same category at between $250 and $253 per ton, down from $252 to $255 per ton on a FOB basis.
“The impact of the ban is uncertain, but Turkey’s wheat imports are likely to decline even without restrictions,” Sofikun said in its weekly note.
She added, “We may see a decrease in estimates of Turkey’s wheat imports in the new report on estimates of supply and demand for agriculture in the world.”
Russia is the world’s largest exporter of wheat, and its grain exports rose to 1.36 million tons last week, from 0.80 million the previous week.
Soficon quoted port data as saying that exports included 1.19 million tons of wheat, up from 0.72 million tons in the previous week.
