Rain Slowing French Corn Harvest Widens Premium to U.S. PricesWhitney McFerron
France’s corn harvest, the biggest in the European Union, is being delayed by excess rain, slowing exports from the country and pushing up prices for the grain relative to those in the U.S.
Farmers in the main French growing regions still needed to harvest 42 percent of their crops as of Nov. 11, compared with just 12 percent at the same time last year, according to crop office FranceAgriMer. Growing areas in the southwest, center and northeast had two-to-three times the normal amount of rain in the last two weeks, after the northeast saw double the average precipitation in October, AccuWeather Inc. said.
“Soil moisture is a real disaster,” Renaud de Kerpoisson, the president of Bourges, France-based farm adviser Offre & Demande Agricole, said in an interview last week. “There is not enough corn on the market at this moment and everybody is waiting for the harvest.”
Corn for January delivery on NYSE Liffe in Paris closed at 174 euros ($234.93) a metric ton on Nov. 15, about 50 euros more expensive than December futures on the Chicago Board of Trade, the contract closest to expiration. The premium widened from 17 euros a ton in June, while the price difference between contracts with those delivery months was 32 euros a ton at this time last year. Corn has still tumbled on both exchanges in 2013 on the outlook for record production worldwide.
The EU issued licenses for French shippers to export 166,583 tons of corn since the marketing year began July 1, 12 percent less than at this time last year, according to online data from the 28-country bloc. French corn exports may total 5.62 million tons during the 2013-14 season, down 14 percent from last year and below a previous forecast of 5.91 million tons, FranceAgriMer said Nov. 13. It also cut its estimate for the French harvest by 1.4 percent to 15.16 million tons.
Spot prices for French corn in Bordeaux were $237.85 a ton as of Nov. 14, or $22.70 more expensive than U.S. grain at the Gulf of Mexico at $215.15 a ton, said Nathan Kemp, an economist at the International Grains Council in London. French prices were near parity or at a discount to the U.S. from mid-August to mid-September, IGC data show. The U.S. is the biggest exporter.
Harvest is progressing slowest in southwest France, with 37 percent of crops collected in Aquitaine and 45 percent in Midi-Pyrenees as of Nov. 11, compared with a 90 and 95 percent pace respectively last year, FranceAgriMer said. Agen, France, located in Aquitaine, had 3.5 inches (8.9 centimeters) of rain in the first two weeks of November, compared with normal rainfall of 1 inch, said Dale Mohler, a senior meteorologist at AccuWeather.
Precipitation may slow fieldwork further this week, with western and central France expected to receive an inch of rain from storms starting Nov. 20, Mohler said. Northeastern regions may be drier, he said.
Farmers “don’t harvest if it’s too wet, so they need days with sun for things to dry out,” Mohler said. “This time of year the sun is pretty low, and it takes longer to dry out than it would in September.”