France surprises grain market with unusual deals

02.08.2016

Reduction of French wheat production and quality resulted in making unusual deals in the grain market this year.
France purchased large lot of Romanian wheat. A deal for transporting 55 KMT of grain from Constanta to Dunkerque for shipment during August 5-9 was made at USD 8.5/MT. Currently there is no exact information about wheat quality and for what purposes it was purchased. But market operators believe that wheat was bought to secure a futures contract on MATIF.

A consignment of French wheat is expected to be shipped to USA in the near future. Grain is being loaded on the vessel UNION ERWIN in Rouen (35 KMT) and Dunkerque (10 KMT). Charterer – Glencore Grain. According to estimates of information service "Promyshlennye gruzy", transportation of 45 KMT of wheat from two French ports to the South of USA currently costs USD 15-16/MT. Please, note that for the last time French wheat was shipped to US consumers in November 2014 (Invivo Company was the charterer). And before that there were no shipments on this route for 12 years.

In addition, there was information that France was going to import Russian wheat. However, the market reacted to this information with skepticism, as price advantages of goods from Russia are offset by the current import duty at EUR 12/MT and the cost of freight. Although market participants do not exclude that it may be high protein wheat.

 

 

 

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