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High Exports of Russian Wheat Put Pressure on European Prices

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By Yusuf Khan

In its monthly report, Strategie Grains warns that the high exports of Russian wheat will continue to impact prices in Europe. Despite strong harvests in the Black Sea region, European wheat production is expected to remain flat at 125.6 million metric tons for the 2023-24 season. However, with the significant volume of wheat exports coming from Russia, European exporters will face intense competition on the international market.

According to Strategie Grains, French wheat prices are predicted to decline moderately as the harvest campaign progresses. While there have been strong export sales to China, Russian grains pose a much fiercer competition on other destinations. This is particularly true for other European exporters such as Germany, Poland, and the Baltic states, which will face additional pressure due to the growing momentum of Ukrainian exports from Odessa.

The impact of the strong Russian harvest is evident in Paris, where wheat prices have fallen by 25% this year. On Wednesday, prices reached a low of EUR230.75 per ton and slightly recovered to EUR231.50 on Thursday, marking a seven-week low.

Unfortunately, Europe is also experiencing poor harvests for barley and corn due to unfavorable weather conditions during the past summer. Corn production is forecasted to reach 60.6 million tons for the upcoming season, showing an improvement from the weak harvest of 2022-23. However, barley production is expected to decrease to 47.2 million tons, both falling below their respective five-year averages.

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