European wheat subsidies were lower than expected and prices fell

Introduction: in the week to March 18, European wheat prices mostly fell, mainly because the export subsidies provided by the EU were lower than the market expected In addition, the analysis organization increased the European wheat output and ending inventory in 2004 / 05, which made the market worry that the high inventory will bring further pressure on the wheat price Wheat for delivery in Rouen, France, was 97.50 euros / ton on Friday, down 0.50 euros from a week ago On the French matif exchange, the price of wheat for delivery in May was 106 euros / ton, the lowest level in nearly two months On Thursday, the European Commission on grain management gave a subsidy of 8.94 euros / ton to 74000 tons of wheat, compared with 10 euros / ton last week to 2000 tons of wheat, and 10 euros / ton two weeks ago to 451750 tons of wheat This week, French strategic grains released its monthly report, raising its grain production forecast for the 25 EU countries in 2004 / 05 to 286.2 million tons, higher than the previous forecast of 284.5 million tons This is due to the adoption of official revised data from Germany, Poland, Slovakia and the Czech Republic by strategic grains In addition, due to the rise in EU wheat prices over the past month, strategic grain companies this month lowered their wheat export forecasts for the 25 EU countries in 2004 / 05 by 100000 tons This makes the final inventory forecast of 25 countries in 2004 / 05 higher than that of last month by 700000 tons, while the intervention inventory is expected to reach 7-8 million tons In addition, the supply of wheat for export in the EU in 2005 / 06 will be significantly higher than the demand According to current estimates, wheat export demand can reach up to 13 million tons to 14 million tons at most, but the amount of wheat available for export is estimated to reach 30 million tons when the wheat in the open market and intervention inventory are added together Strategic grains said this means that the supply for 2005 / 06 is still very large according to the current forecast, which will continue to limit the space for EU wheat prices to rise