"Overall I think there is some worry about the sluggish rate of EU wheat exports," one German trader said. "It was good to see French wheat winning part of Egypt's international purchase tender on Tuesday along with rising figures for EU wheat exports." "But the EU is achieving a large wheat harvest this summer and exports will have to go out at a considerably higher rate than they are running at now if we are to avoid burdensome supplies."
Egypt's state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 350,000 tonnes of wheat on Tuesday including 60,000 tonnes of French wheat. Consultancy Agritel estimated on Wednesday that France would need to export 20.1 million tonnes of soft wheat this season after harvesting its second-largest crop in history at 39.2 million tonnes, up 14.9% on last year.
"French wheat's competitiveness is a good thing but there are still difficulties in finding new markets. French wheat prices cannot afford to rise," a broker said, pointing to ample international supplies and sluggish demand. In Germany, wheat harvesting is ending and markets were taking a relaxed view of lower protein levels than usual in wheat in final northern regions.
The final regions suffered the double blow of the July heatwave followed by repeated rain in August. In the northern region of Schleswig-Holstein, usually an important export production area, wheat has about 11.5% protein content instead of 12% usually. Germany traditionally exports high quality wheat with 12% protein and above.
Wheat with 11.5% protein is good enough for importers such as Algeria and Tunisia and traders say they expect German wheat to be offered more actively in tenders from these two countries.