We recently launched a new service the ‘Global Grain Outlook’, this monthly forecast looks beyond our usual analysis to provide forecasts on key global grains and oilseeds over a longer horizon – request more information
In our last GGO we focused on the relationship between UK and EU wheat.
Current season European wheat markets have been well supported by poor yields and small crops.
Additionally, as Russia placed export taxes on wheat exports, demand was pushed toward France, which with such a small crop could not afford to match this demand and needed to price higher.
The 2021/22 Season
In France, the wheat crop this season fell by over 10MT year on year to just 29MT, mainly due to a fall in area after heavy rains, but also combined with poor yields.
So, what do we know for the upcoming harvest?
The French wheat area being forecast for harvest this season at 4860Kha is a return to average acreage.
Alongside this return in acreage, the prospects for yields are continuing to be positive for French wheat production. Being rated at 84% good and 4% excellent, the condition of French wheat is in the best-combined condition since 2017.
Bar the appalling year of 2016, when persistent heavy rainfall led to multi-year low yields, there is a relatively strong link between the condition of crops at the start of March and eventual yields.
Following this link between March conditions and yield, and bar unforeseen weather events this year and overall yields of 8T/Ha, for now, are being indicated.
Using this yield projection, and a crop size of 39MT is our current forecasts for the size of the French wheat crop for next season, 10MT larger than the current season.
With this return to a large global exporter next season and European wheat will likely need to compete strongly with the Black Sea next season, rather than price above, in order to limit exports.