French Cows Dining on Wheat Instead of Corn After Mega Harvest

  • Feed makers to buy more wheat as large crop weighs on price
  • Paris wheat's premium over corn widens to most since July

France’s surprisingly large wheat crop will have the nation’s cows, pigs and chickens dining on more of the grain instead of corn.

Feed makers will buy more wheat because a better-than-expected harvest will make it more attractive, said Alexandre Boy, an analyst at Paris-based farm adviser Agritel, who predicted that wheat prices will hold up better than corn in the coming months. Wheat usage in animal feed will rise 16 percent this season as demand for the other grain declines 22 percent, according to crop office FranceAgriMer.

Wheat prices have been rising since mid-September and Paris futures for March are at the biggest premium to corn since July. That’s a reversal from last month, when drought that damaged corn plants meant feed makers had to pay almost as much for the grain as wheat. Wheat usually costs more due to its higher protein content.

“There’s a strong switch from corn to wheat, because the feed makers are taking advantage,” Agritel’s Boy said.

Corn for March delivery traded at a discount of 9.25 euros ($10.30) a metric ton to milling wheat for the same month on Euronext on Thursday, the most since July 30. The discount was as little as 0.25 euros on Sept. 11.

Milling wheat for March has risen 4.7 percent since Sept. 15, compared with a 0.7 percent gain for the corn contract. The wheat harvest was more than a million tons higher than analysts had predicted early August.

Paris wheat futures outperform corn prices

Corn for March may cost as much as 12 euros less than wheat this month as French and Ukrainian farmers sell grain that they’re currently gathering, according to Paul Gaffet, an analyst at Offre & Demande Agricole in Bourges, France. While Boy sees the discount widening, he said it may not reach the 20-euro level last seen in March because the European Union still needs to import 15 million to 16 million tons of corn this year to meet demand.

On the Chicago Board of Trade, wheat for December delivery fell 0.2 percent to $5.1725 a bushel. Corn for delivery in the same month slipped 0.1 percent to 3.885 a bushel while soybeans for November dropped 0.2 percent to $8.755 a bushel.

French soft-wheat production rose 8.8 percent to 40.8 million tons, while the corn harvest is forecast to fall 27 percent to 13.7 million tons, the Agriculture Ministry said Sept. 4. The country’s feed makers will buy 5.1 million tons of wheat this season and 2.9 million tons of corn, the least in six years, FranceAgriMer estimates.

“Definitely the big wheat crop will substitute some of the corn needs in feed,” said Stefan Vogel, head of agricultural commodity research at Rabobank International in London.

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