Wednesday, 23 June, 1999
French wheat prices remained steady despite news that the EU may delay granting awards for free-market grain exports until after July. Aimed at clearing storage space, the Commissions export policy is likely to remain heavily focused on sales from intervention.
Iran and Jordan have bought a total of 250,000 tonnes of EU feed barley. While full details of the purchase have yet to be confirmed, the barley is largely expected to come from intervention stores.
German grain markets continued to see slow trading activity over the week. Hardly any old-crop can be found with most feed barley having been absorbed by intervention. Only small quantities of bread wheat remain on farm.
ZMP, the German market analysts, reported few contracts made for new-crop grain to date. With new crop prices trading in a range of DM225-230 per tonne for high quality wheat and DM180-205 for feed barley, much of the coming wheat and barley crop is likely to end up in store.
The effect of the Spanish drought has shown itself in the 1999 production estimates released by the Spanish Agriculture Ministry this week. Production is expected to fall by 14%, 23% and 27% respectively for wheat, barley and oats.
Strategie Grains, the French analysts, estimated that the cold weather spell is likely to have reduced the 1999 French wheat crop by 300,000 tonnes. The French Agriculture Ministry also pointed to a decline in winter barley production of 14.8%, the effect of both lower sowings and a lower average yield per tonne compared to 1998.