French farmers are getting the smallest wheat yields in three decades after waterlogged fields decimated crops, according to a farm adviser.
The European Union’s biggest wheat producer is reaping about 5.5 metric tons of the grain for each hectare (2.5 acres), the lowest since 1986 and 24 percent below the five-year average, CRM AgriCommodities said. Some northern areas, the worst hit by floods this year, may yield just 3 tons per hectare, according to the Newmarket, England-based company.
The rain damage has put wheat in the worst shape in years and CRM sees the crop dropping by about a quarter to the lowest since 1993. With grain in poor quality and unable to compete with cheaper supplies from the Black Sea region, traders haven’t bothered offering French wheat in recent tenders to Egypt, the biggest buyer. Still, as conditions continue to deteriorate, prices in Paris rebounded over the past three weeks.
“We are seeing very, very shocking yields this year,” Benjamin Bodart, founder of CRM, said by phone on Monday. “Just seven to nine weeks back, we were talking about the French crop being between 36 and 38 million tons and now we have got confirmation that we could see a crop below 30 million tons.”
A harvest of that size would be smaller than other estimates. German commodity trader BayWa said last week that the crop will drop to 34 million tons this year. That’s lower than the 37 million tons forecast by France’s Agriculture Ministry on July 12 and down from 40.9 tons last year. Group Soufflet has pegged this year’s crop at 35 million tons and InVivo chief Thierry Blandinieres told Les Echos a drop to 32 million tons “seems excessive.”
Just 42 percent of French soft wheat was in good or very good condition by July 18, crops office FranceAgriMer said Friday. That’s down from 49 percent a week earlier and 76 percent at the same time last year. The country’s harvest was 17 percent complete, it said.
Milling-wheat futures gained 7.5 percent since July 1 and touched a six-week high on Euronext on Monday. In contrast, prices on the Chicago Board of Trade, a global benchmark, reached a decade-low last week amid expectations of ample supplies from Russia and the U.S., the world’s largest exporters.
Higher prices would further curb demand for French wheat from countries like Egypt, which imports massive amounts to provide citizens with cheap bread.
“France exports wheat to Egypt and North African countries, so price competition with Black Sea wheat could cap any sustainable rally on the Euronext,” CRM’s Bodart said.